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The Grapevine

The WSTA's views, distilled.

WSTA fighting fraud

WSTA fighting fraud

Alcohol fraud in the UK damages legitimate businesses, brand reputation and deprives the Treasury of duty income. Illicit products also adversely affect consumers and in some cases can cause significant harm. It is estimated that alcohol related fraud costs the Treasury £1.3bn in lost revenue a year. This happens through a range of methods including failure to pay duty, theft from retailers and wholesalers and illicit alcohol.

While the problem is significant, too often information about incidents of fraud, particularly at the retail level, is too fragmented. The WSTA takes this issue very seriously on behalf of our members and has therefore been working on a number of initiatives to support them to tackle this problem.

We are pleased therefore to announce that the WSTA has launched a new confidential fraud reporting tool at www.wstafraudreport.co.uk.  This allows anyone to report a suspected fraud on a simple form on a confidential basis and this will plot the incident on an online map with a link to the details that have been submitted. With the ability to identify hotspots and trends, we will be able to share anonymously this with law enforcement colleagues to help inform their response.

For this resource to be successful, we are urging members (particularly retail members and wholesalers) to identify concerns and actively report them, as well as actively support the initiative and publicise this site in their own businesses websites.

We have deliberately tried to keep the site simple and business-like, with only a small amount of information being sought and we will be refining this in the light of experience.

Once a report is submitted, it is invisible to the person submitting it for data protection reasons.  We will be notified when each report is made and assess it before it goes on the system or is shared with law enforcement.

I am confident this will be a welcome addition to the range of reporting mechanisms currently available and go a long way in our fight against alcohol related fraud.

For more information you can visit http://www.wsta.co.uk/what-we-do/policy/133-info/607-fraud-prevention-unit

 

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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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The great glass rollercoaster

A case study into how the WSTA works for its members.

At the beginning of 2012 the cost of recycling glass, more specifically the cost of glass Packaging Recovery Notes (PRN), stood at a stable average of £10 per tonne. However a combination of tougher recycling targets from the Department of Environment and failures in the PRN market saw this price rocket to a peak in 2013 of £85 per tonne, a staggering 850% increase.

At first one or two members highlighted this issue to us, hugely concerned about the impact this was having and, in one instance, threatening the future viability of a  business.  After further inquiry it became clear that this wasn’t just a minor issue affecting a few people, but a cost burden that was having a major impact on cash flow and producers’ bottom lines across the trade. We calculated that when PRN prices were at their peak, producers had to find an additional £51m per year to cover the costs.

We knew we needed to act and so the WSTA took a leading role in co-ordinating the response across the trade. First, we coordinated an industry lobby of the then Minister which led to a review of glass recycling by the Advisory Committee on Packaging in 2013.  The review concluded, amongst others, that the recycling targets had been based on a significant over-estimation of the amount of glass circulating.  In a nutshell, businesses had to recycle more than they needed to and this was putting a strain on the supply chain forcing prices up.

We were delighted that the Minister took on board our concerns and the Department announced earlier this year it would revise downwards both the estimate for the amount of waste glass produced annually and also the business recycling rates for glass. The recycling rate for obligated businesses came down from 81% to 75% in 2014.  

We then looked to address the failures in the PRN market. A major criticism of the PRN system has been a lack of transparency about PRN prices which has undermined industry confidence in the system. In order to make this more transparent, the WSTA has now launched a dedicated website page for our members that will provide weekly updates, in partnership with The Environment Exchange, of PRN prices.

WSTA Members can access the prices here: http://www.wsta.co.uk/packaging-recovery-note-prices

Now they will be able to see what else is happening in the market and whether the prices they are paying their current compliance scheme are in line with the market price. In addition we are working with complydirectto develop a compliance scheme specifically tailored for the needs of WSTA members.

This action has thankfully helped to bring a costs down to a more acceptable level, now nearly to £20 per tonne, significantly easing the pressure on the trade. While we cannot always foresee when an issue like PRNs occur, when they do the WSTA is on hand to support our members to navigate them as best we can.

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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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