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The Grapevine

The WSTA's views, distilled.

Devaluation and the UK’s wine industry

Harold Wilson’s infamous words on the devaluation of sterling “It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued.” may seem as relevant today as they were in 1967 following recent events, but the UK’s economy is much different now and the impact of the Brexit fuelled sterling devaluation on the wine industry right here in the UK is certainly being felt.

 

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Fine Wine Mine

Despite our Annual Conference delivering a great day and evening, some of the WSTA team hadn’t quite had enough excitement for one week and headed off in search of more. The next morning we hopped on a train from Paddington and embarked on a visit to WSTA member, Octavian, a fine wine cellar buried in  the heart of Wiltshire.

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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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