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The Grapevine

The WSTA's views, distilled.

Christmas Spice and All Things Nice.

We are delighted to have enjoyed the company of 40 MP’s and Peers, including George Eustice MP, Angus MacNeil MP, Sharon Hodgson MP and Baroness Burt.

And we are proud to say that this annual Christmas drinks is becoming a premium date in the calendar at Westminster, offering a great chance to discuss industry issues in a convivial setting.

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AWRS and due diligence

A number of questions have come in relating to how due diligence will work. It may be that you have already received a questionnaire from trading partners asking all sorts of details about your business.

If you haven’t received one there could be one winging its way to you, so I thought I might try to interpret what the requirements are. 

This is an area that is far from settled and will continue to develop and evolve for some time.

Don’t be alarmed if you receive a letter from a trading partner seeking information about your business. “Due Diligence” is increasingly becoming the new normal, The due diligence requirement already applies to traders in bond and will soon apply to duty paid wholesalers. 

At its heart, it requires businesses to know who they are trading with and then understand the risks of that relationship. The aim is to avoid traders introducing smuggled or counterfeit goods at any part of the supply chain.

It will be a matter for individual businesses to satisfy themselves that their trading partners are suitable.  Whilst trade buyers will eventually be able to see that their proposed trading partner has an AWRS registration and is a “fit and proper” person, that alone will not be enough to satisfy due diligence requirements.

There is some guidance from me on the front page of the WSTA website, which you can access through the members’ section and log-in:

 

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This considers the sort of questions that a business might wish to ask and, in turn, provide to its trading partners.  The list is neither exhaustive not prescriptive and not all questions will be necessary in every case.

I am aware that a number of businesses are not prepared to answer all of the questions that are being asked of them – directors’ passport and home address details are a particularly sore point. There is no obligation to supply all the information being requested.

Common sense will have to come into play here and the person asking the questions will need to consider whether they have enough information to go ahead with the trade.

 If some information is absent – this can increase commercial risk, or at least affect the terms on which parties are willing to trade. 

Put simply, the more information you have, the more comfortable you may be in offering better credit terms, increased volumes and having less frequent reviews of the relationship.

The most important point is that due diligence is not about having answers to a set list of questions. Think about the questions you need to ask and analyse  the effect of the answers you receive against your research and against your business’ risk appetite.  

I believe there is a learning curve for businesses and HMRC and that the official guidance will develop further once it is up and running in the real world.

 Competition laws may also preclude companies from seeking some information about, for example, the underlying reasons for a deal or its profitability.

There may be a role for third party due diligence consultants to hold information securely and report a clean bill of health (or otherwise) to an inquiring party without breaching confidentiality.

I am working on a model due diligence policy and we also hope to be able to offer the services of a selection of external due diligence consultants to members in the near future.

 

 

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WSTA's Logistics Group calls for vigilance against delivery hijacks and company identity fraud

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Alcohol companies have been asked to warn lorry drivers not to be duped by thieves posing as warehouse staff.

Following a spate of thefts logistics companies flagged up the risk of robberies at a recent meeting of WSTA Logistics Group.

As part of the Group’s work it considers fraud risks and contributes to discussions with HMRC through the Joint Alcohol Anti-Fraud Task Force.

Alcohol exports and imports have recently been targeted on their way to the warehouse.

The lorry drivers are stopped near the destination by someone with plausible paperwork, who appears to be expecting the load and claims to work at the warehouse.

The driver is told the warehouse is busy and that the goods should be dropped off round the corner.

It is, of course, stolen at that point.

There are also instances when drivers are alleged to have colluded in this type of theft.

To prevent being raided companies should give drivers clear instructions never to drop their load anywhere other than within the warehouse premises.

If they are approached drivers should call 999 immediately and ask for Police assistance.

In a second type of fraud, legitimate company details are being used to make corrupt purchase orders appear genuine.

The fraudsters use contact details such as telephone numbers and e-mail addresses which are subtly different from the real ones - for example .com instead of .co.uk.

The delivery address will take the goods straight to the thieves’ premises.

Or on some occasions the correct delivery address will be given but the consignment is then diverted while en route.

Sometimes these frauds appear crude; others appear very plausible and are often addressed to hundreds of potential suppliers, who may be lured in by the idea of a major UK customer.

These crimes can be difficult to prevent and detect.

Regular suppliers can be given clear advice about how orders will be made and processed, but prospective suppliers do not have that protection.

Companies can help by being willing to respond quickly to queries from potential suppliers who may be victims of this sort of scam.

 

To help stamp out this type of fraud, companies are asked to report incidences to ActionFraud – www.actionfraud.police.uk and to the WSTA as we can alert members of the Fraud Prevention Unit to the details being abused in each case.

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ENGLAND AND AUSTRALIA CLASH IN WINE-TASTING RUGBY WORLD CUP

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England scored a shock win over Australia in a battle of the white wines led by former England rugby ace and wine buff Andrew Sheridan.

However, The Wine and Spirit Trade Association England v Australia 'wine off' ended in fans giving an overall victory to Australia when the two nations went head to head in a blind tasting of sparkling, white and red.

In a tight run contest, three of Australia’s bestselling wines were pitted against three wines from the award winning Bolney Wine Estate. Australia pushed their way over the try line with their red and sparkling, but there was a runaway win for Bolney in the white wine category for its Bacchus.

Much like their status on the rugby field, Australian wines are clearly still global heavyweights, but this taste test shows that the English are beginning to put up a pretty good fight.

When it comes to a price match the clear winners in this contest are the Australian wines. English wine producers believe the latest government commitments to support English vineyards could make the price of English wine more palatable in the future.

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Sheridan, 35, who hung up his boots last year after sustaining a neck injury, said: 

"The Australian wines come out on top for value, and in this blind tasting snuck over the line to score in the red and sparkling categories.

 

“The Aussies know how to make a very drinkable, reasonably priced wine which will be accepted at anyone's World Cup party. But there is no doubt that the English underdogs are snapping at Australia's heels in the wine market.

 

“Overall it was an evenly matched contest with each side showing different strengths and weaknesses as expected from very different climates.

 

“In the Australian camp, we didn't come across a bad wine and like their rugby players the wines were consistently very good. But we shouldn't under estimate English wine. They have the potential to surprise everyone and all it will take is a burst of sheer class to come out on top."

Sheridan has shown his strength on the pitch, but is now pouring his passion and drive into the wine trade. The burly former prop lives in the south of France with his wife and five year-old daughter where he is immersing himself into the world of wine.

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Not only is he heaping on the wine qualifications - having already passed his WSET level 2 and 3 and is midway through his diploma for level 4 - he is also taking a hands on approach to learning about vino. Sheridan said:

"This harvest, I volunteered at the Bandol wines vineyard in Castell-Reynoard.

"I want to learn about this industry from all sides. Hand picking the grapes was hard work. I didn't come out of the vines as battered as I was from the rugby pitch, but it was certainly back breaking work."

Sheridan used his wine tasting expertise to judge three Sussex wines from the Bolney Wine Estate against Treasury Wine Estate's Australian Wolf Blass and Lindemans.

Four English fans and four Australian joined Andrew in marking their winners in three competing categories. The wines were then individually marked with points awarded for appearance, aroma, body, taste and finish. Sheridan said:

"The surprising victory came in the shape of Bolney's Bacchus which came top with both English and Aussie fans.

 

“The Australian wines were consistently good and very drinkable.  But what seemed to unite both sides and what impressed me, was how aromatic and sophisticated the English white wine was.

“It is an exciting time for English wines. They are showing that the cooler climate wines can be complex and compete with their more established New World cousins."

 

The convincing win for Bacchus over the popular Chardonnay, Lindemans Bin 65 2014 shows why English wine is filling up its trophy cabinet.

 

In the 2007 Decanter awards English wine didn't achieve a single win - in contrast to this year when they were awarded over 100 medals.

 

The red wine taste test showed the Australian, Wolf Blass Yellow Label Cabernet Sauvignon ahead of the charge when pitted against Bolney's Pinot Noir. Sheridan added:

 

"The Wolf Blass was packed with very obvious black fruit flavours, but what I found interesting was it was not too heavy. At 13.5 % abv, there was less alcohol than you might expect from a punchy Australian Cabernet Sauvignon.

 

“In comparison the English offering, Bolney's Pinot Noir, had strong red fruit aromas, but not the same concentration of flavours as its Australian competitor. The English red was impressive for a cool climate wine and may well suit drinkers after a lighter red wine."

 

Finally the sparkling category put the Wolf Blass Yellow Label sparkling up against Bolney's Blanc de Blanc 2010, where fans put the Australian fizz in front. Sheridan said:

 

"I have to say I found the English sparkling had the best texture and the longer finish. It was refreshing and citrusy, but perhaps a little high on the acidity front. Australia's fizz had more weight but for me, not as much finesse when it came to texture."

Australia is known for its more favourable grape growing conditions, but English wine is fast becoming a real competitor in the global wine market. 

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Positive news from HMRC

HMRC have indicated there is NO policy of automatically applying conditions to each excise trader authorisation that they issue.

They will only apply conditions where they identify a risk.

When HMRC receive an application to vary conditions, they will also consider if there is any need to have the conditions at all.

HMRC have made it clear they are open to hearing from businesses who would like to have their excise authorisations reviewed or varied.

I’ve now seen several examples of businesses applying to have warehousing conditions or WOWGR authorisations reviewed - resulting in all their conditions being assessed and removed.

This is an encouraging development and has given businesses more commercial flexibility.

 

I believe there is a good opportunity to rationalise conditions and I would encourage other members to make the most of the opening.

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