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The Grapevine

The WSTA's views, distilled.

Miles has overall responsibility for the organisational strategy and public affairs and public relations work of the WSTA. Further responsibilities include commercial services, finance, personnel and membership recruitment.


Budget Reaction – unsurprising surprises

What was surprising about the result of the Budget this year was that it that it did not contain any surprises.

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Wine and spirits - our challenge to the industry

Last week the WSTA launched our annual Budget effort with an ambitious, but achievable aim of convincing the Chancellor to cut wine and spirits duty by 2% in the Budget Statement on the 8th March. The facts about duty are well known:

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WSTA and UKTI host ‘British Gin’ reception in Brussels

Gin has long been seen as an iconic British product, but it's current renaissance is seeing it become the premium ‘drink of choice’ for many discerning consumers, with specialist gin bars and new distilleries springing up across London and nationwide. Recent data in the WSTA’s market report showed Gin growing at 5% in the off trade and 10% in the on trade.

And this success isn't restricted to UK shores, with global output forecast to grow by 13 million litres a year. Nowhere is this demonstrated better than in Europe. We have recently seen rapid growth in gin sales in the Spanish, German, French and Italian markets. And Belgium, whose capital played host to the first WSTA-UKTI Reception, has entered the top 20 export markets for British gin with a staggering 60% increase in the number of cases sold – the biggest increase in any market worldwide.

This rise in demand from the continent is being largely met by British gin producers, making it one of the UK’s biggest exports. Almost 140 million bottles of gin were exported from the UK to foreign markets in 2013 – enough to fill three Olympic swimming pools!

I was delighted, alongside colleagues from UK Trade & Investment and a former colleague of mine, Her Majesty’s Ambassador to Belgium, Alison Rose, to host an event 'first' in the UK's historic Residence in Brussels earlier this month to celebrate the growing success of British gin producers.

 

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The reception featured four UK gin suppliers and was a convivial advertisement for a genuine British success story. Attended by MEPs, policy makers, Belgian industry representatives and media, guests enjoyed the taste of a wide range of products including some classic gin cocktails: A Summer Mule, a Pink Lady and a Rosie Lee. The event also provided an ideal platform to set out what the WSTA has been doing to support the industry and what we want to do next.  

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I am delighted that our successful event was able to demonstrate what an exciting time it is for those in the gin industry here in the UK to a genuinely European audience; and as British Gin becomes ever more popular on the continent, the WSTA will be supporting our members to navigate their way into even more European markets. Watch this space…

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’Drop the Duty!’: whatever the result, thank you for getting involved!

With just a few days left before Budget day, it is worth reflecting on what we have achieved – regardless of the end result. Without a doubt, we have made our voice heard with approaching 90% of MPs in total and almost 95% of Conservative MPs receiving emails - many of them more than six, and some more than 50! To an even greater extent than last year, we have presented a united industry front, while at the same time showcasing the rich diversity of our wonderful industry. Craft distillers and English wine have, rightly, figured more prominently in communications with MPs and in press coverage, in both the trade and national titles.

 

Most importantly, we have made effective use of an independent economic evidence base produced by EY to the extent that no one, either at the Treasury or in Parliament, has dismissed the figures or seriously challenged our arguments – on the potential enhanced contribution to the public finances, to GDP, to job creation or to pubs and the wider hospitality sector. This is both a tribute to the credibility of a compelling case and a reflection of the higher standing of the industry in the eyes of government and Parliament. In short, our contribution is better understood and increasingly appreciated by those in the corridors of power. This is perhaps the biggest gain from two broad based, economically evidence-based and relentlessly positive tax campaigns in two years.

 

None of this tangible change in perception and reputation would have occurred without WSTA members and Harper’s readers being prepared to get stuck in and to throw your own and your company’s weight behind our ‘Drop the Duty!’ campaign. Every email to every MP made an impact, but perhaps the most important effect has been to make our elected representatives realise that our industry is both global and local, is about both big business and normal people - their constituents, their voters. As one MP’s researcher told us, ‘”We see ’Drop the Duty!’ as a constituency-driven campaign. That is why my MP is interested!”

 

This represents real progress and – alongside our achievements towards goals agreed with the Government, notably under the Responsibility Deal and through the growth and success of Community Alcohol Partnerships – it fills me with hope and confidence that the industry is in a far better place at the end of this Parliament than it was at its halfway stage. So thank you for all that you have done and the support you have given: holding off – for now! - the threat of minimum  unit pricing, securing the abolition of the Alcohol Duty Escalator, establishing the WSTA as the key interlocutor with the Government on alcohol issues and changing government’s perception of our industry – from problem provider to responsible economic force. We are in a good place to respond to whatever the next Parliament and next Government brings – from emergency Budgets to ‘son of Responsibility Deal’.

 

 

And what of next week’s Budget result? I don’t have a crystal ball, but I am confident our voice has been heard loudly and understood well. We must hope that the Chancellor has listened and that his Budget enables our rightly proud industry ‘to play its part in the UK’s recovery’ - the words he used when I presented him with the WSTA’s award of thanks on the steps of Number 11 earlier this year. Whatever Budget day brings, please accept a heartfelt thank you from all at the WSTA for your valiant efforts. Here’s to enjoying a small drop and a big cheer…!

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Just 93 days to go...

The outcome of the next General Election is far from predictable, but one thing is for certain and that is whoever forms the next Government after polling day in 93 days’ time will have a big impact on the wine and spirit industry.

With key policy issues such as taxation, licensing, labelling, and the responsibility agenda all to be looked at and decided on by a new Government, potentially a coalition of two or more parties, we at the WSTA were keen to ensure that political parties were not only made aware of the impact they had on the industry, but also understood what policies they could adopt in order to help us grow, create jobs and further support our consumers.

Last week we therefore published our Election Manifesto outlining a positive policy programme that covers all of the issues on which we work. We will be sending these to the political parties and asking them to support the industry through adopting these policies. Some of the commitments in the manifesto include:

Business and tax - In addition to the 2% cut in duty that we are calling for in our budget campaign (www.droptheduty.co.uk), we are also asking party leaders to visit a distillery and a vineyard during the election campaign. This will give the opportunity to speak to those working in the industry about the problems they face and understand why we are calling for more support. We are also asking the Government to work with the trade on helping to develop qualifications for those that work in the wine or spirit industry and for them to look at introducing a lower duty rate for micro distillers which had such a positive impact when introduced for micro brewers.

Alcohol related harm - The WSTA takes its work around alcohol responsibility very seriously and is a commitment partner with the Government in delivering the Responsibility Deal pledges. Yet too often Government intervention is not targeted on those that misuse alcohol. We are therefore asking for a break in the constant changes to the Licensing Act and asking the Government to focus policies instead on the minority who misuse alcohol. We are also calling for alcohol education to be a feature on the national curriculum and for the Government to protect the safer drinking guidelines that are now on over 80% of labels.

Agriculture and consumer awareness - With the growth of the English wine industry we are looking to highlight the agricultural importance of the sector by asking parties to consider looking at tax incentives for those that invest in vineyards and ensuring that UK vineyards have access to regional development funding to support improvements to the landscape. We are also looking to engage with the Government on the issue of labelling, including calorie labelling, which is currently being considered at EU level.

These are just some of the highlights, the manifesto itself contains many more. If you want to know more about the commitments we are asking for you can find the full manifesto at the following link: http://www.wsta.co.uk/images/PAN/manifesto/Manifesto2015.pdf

A two page version is available here: http://www.wsta.co.uk/images/PAN/manifesto/Manifesto2pg.pdf

The infographics are available here: http://www.wsta.co.uk/images/PAN/manifesto/Manifestographics.pdf

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Drop the Duty - Small drop, big cheer! Please help secure a 2% cut in alcohol duty

With the New Year already well under way, I can think of at least one important resolution that I am determined to keep – calling for the Government to ‘Drop the Duty’ on wine and spirits by 2% in the upcoming Budget.

With just nine weeks to go before the Budget and the election only months away, we now have the perfect opportunity to make a positive case about the huge and growing contribution that our great industry makes to a successful UK economy.

Although the sector had successes in 2014, particularly in helping to secure the end of the alcohol duty escalator and a spirits duty freeze in the 2014 Budget, the wine and spirits industry is still having to work within a duty system that places unnecessary burdens on producers, distributors and consumers.

Our ‘Drop the Duty!’ campaign, launched in partnership with the Scotch Whisky Association and the TaxPayers’ Alliance, aims to go some way to solving this by calling for the Chancellor to make a modest 2% cut in alcohol duty. To highlight the importance of this, we took over a pub in Central London showing exactly what your local would look like if the Chancellor was in charge.

 

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We’ve also got the figures to prove that a 2% drop in duty would bring major benefits to the UK economy. Recent analysis undertaken by EY has found that a modest 2% cut in duty on wine and spirits this year would lead to an additional 24,500 jobs across the sector. This not only allows the industry to continue to flourish, enabling producers to invest and expand their businesses, but will also boost the UK economy more broadly – generating an additional £1.5 billion for the public finances. 

As we all know, this is not just an issue for the health of the wine and spirits industry. Consumers are also being unfairly hit by the current duty system. In the UK we pay almost 60% tax on a bottle of wine and almost 80% on a bottle of whisky or gin.  Remarkably, wine duty hasn’t had a cut since 1984 – the same year that Wham were topping the charts with ‘Wake me up before you Go-Go’ and George Osborne was celebrating his 13th birthday.

 

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So, ahead of George Osborne standing up at the Dispatch Box on 18 March, we will be campaigning hard for this change by highlighting how a modest drop in alcohol duty would lead to a significant increase in economic activity across the wine and spirits sector.

Please help us to spread the word about the campaign by emailing  your MP on our campaign website and asking them to urge the Chancellor to cut alcohol duty by 2%. Last year’s successful campaign shows that your email can make a difference. Thank you.

Here’s hoping that we will celebrating at least one completed New Year’s resolution by giving George a big cheer for dropping duty on Budget day! 

 

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