WSTA Logo

The Grapevine

The WSTA's views, distilled.

Quick guide to the November Budget

In March, Carlo and I fielded quite a few questions after the Budget from both members and the media on duty rises. There were some assumptions that led to a bit of confusion around what the Chancellor meant by ‘I can also confirm that I will make no changes to previously planned upratings of duties on alcohol’, which sadly, isn’t as favourable as it sounds. Though it may not make for easy reading, I present to you here a quick stop guide on what to expect and to look out for in next month’s Budget speech.

 

He said no change, that’s good right? 

No. This is taken from the Government’s policy paper on Alcohol duty, released in March this year:

The public finances assume that all alcohol duty rates rise by RPI each year. This measure aims to support the public finances by implementing the expected indexation of alcohol duty rates for the fiscal year 2017 to 2018.

In other words, unless the Chancellor explicitly says so, we can expect an inflationary rise based on RPI, set to be above 3% every year up until 2022. Further to this, OBR projections model future duty intake based on inflationary rises to the end of this parliament in 2022. This is how Philip Hammond got away with saying ‘no changes’; it’s already set in policy yet it sounds like nothing is changing, when in fact the duty rate is increasing in line with policy. Sneaky.

So unless you hear the words ‘freeze’ or ‘cut’, assume an inflationary rise and we will confirm in our Budget Report which will be sent out shortly after the Chancellor’s speech ends.

You can read more here.

 

You have been saying that current government policy is another rise of 3.4% RPI. Is that still the case?

 

Yes and no. The OBR’s March 2017 Economic and Fiscal Outlook publication projects 2018’s RPI rate at 3.4% and that is what we have been working with when doing our sums, presumably the Treasury has too. But the OBR will release a new Economic and Fiscal Outlook publication to accompany the Budget speech on 22nd next month. They may well have revised their projections from the March version, which means we can’t be sure that 3.4% is accurate, but it is unlikely to be below 3% given that inflation is on the rise. But for the purposes of campaigning, we have been using March’s RPI numbers.

 

That’s very unhelpful. So we can’t plan ahead for November’s price changes because the 3.4% rate might change?

 

I’m afraid so. Going by previous Budgets any new rate will be implemented the Monday after the Budget, so the usual quick turnaround is still possible. However, we have also been in contact with the Treasury to discuss implementation dates, stating that if a duty rise was to occur, it would be extremely unhelpful to the entire industry to have to go through the burdens of administration to change prices accordingly just before Christmas. Industry will need time to implement these, not to take staff away from trading during the busiest time of the year. That would be Grinch-like. If the worst was to happen and we have to deal with any kind of rise, no earlier than 1st January earliest seems only fair in terms of a potential implementation date.

 

Is there anything we can do in between now and the Budget?

 

Lots. On Wednesday 11th October, Miles sent out a call to action to our membership outlining what will happen if we as an industry don’t mobilise ourselves, but to recap:

1. Write to your MP – We have pulled together a draft template letter to your MP which highlights the impact of duty increases and asks them to lobby the Chancellor. You should send this to your local MP, make sure you receive a response and keep us informed. This is available here

2. Sign a letter – We need WSTA members of all sizes and types to lend their names to joint letters we will be coordinating to the Chancellor and other Cabinet members. All you have to do is to let us know that you are happy to sign a joint letter on duty and we will share the draft text with you.

3. Let us know the impact on your business – We are always looking for examples about the impact of duty increases on businesses, so that we can develop impactful case studies. For example duty bill as % of your turnover; no. of employees; block on export ambitions and so on. Let us know if you are happy to help with this type of information.

 

Carlo and I will also send out more bespoke materials soon, including tweetable infographics, letter templates to write to your MP based on the part of the industry in which you operate and regional stats, showing the economic activity and employment the wine and spirit industry accounts for in your area.

 

If you have any questions or want to contribute a case study please contact [email protected] 

 

Continue reading
232 Hits

David Richardson to talk about regulations on shipping in bulk at the International Bulk Wine and Spirits Show

I’m delighted to have been asked to present a session at the International Bulk Wine & Spirits (IBWS) Show, taking place in London on January 24-25, 2018

International Bulk Wine and Spirits Show is presented by Beverage Trade Network, the leading online platform dedicated to connecting the global beverage industry. Beverage Trade Network (BTN) successfully connects wineries, breweries, distilleries and brand owners with international importers, distributors, brokers and beverage industry professionals on a daily basis. Strong partnerships with international and US organizations have helped BTN establish IBWSS as a premiere sales and marketing event committed to connecting the private label and bulk beverage industry.

I’ll be talking about “Regulatory issues specific to bulk products compared to cased goods”

The principal reason for shipping in bulk is the ability to save on transport costs and thereby maintain or increase price competitiveness.  The transport method needs to ensure that the integrity of the product is maintained during the transport process.

As well as ensuring accuracy (are you sure that’s chardonnay in that 22,000 litre tank?) bottlers also need to pay attention to rules on blending and other operations, such as rendering a product sparkling.

The use of a bottling facility may also lead to different decisions in complying with excise duty requirements. 

The rules on geographic protection (PDO and PGI for wines, GI for spirits) may prevent or impose specific requirements on bottling. 

Whilst product labels for bulk and cased goods both need to comply with the destination market’s rules, there may be different challenges in designing and applying the labels, for example in ensuring conformance of batch and lot numbers to maintain an accurate audit trail.

The regulatory environment is also affected by the political context.  Brexit is a prime example of an event that will have a major impact on importers and exporters and where the WSTA is well placed to interpret and influence.

 

Full details of the show can be found at http://ibwsshowuk.com/ and I look forward to seeing you there.

#BulkWine #Spirits #IBWSS #London

Continue reading
485 Hits

The changing world has its price - Q2 2017 Market Report

The UK alcohol industry has always managed to weather political storms. Currency fluctuations and duty increases are part and parcel of most business models in an industry that is so trade-orientated. However, Brexit is the x factor we currently face; an unprecedented geopolitical event that, for better or worse, will affect the wine industry for years to come. In particular, the devaluation of the pound after the referendum meant that import costs increased which in turn meant that prices rose. We are beginning to see evidence of this.

Continue reading
609 Hits

Taittinger – We Dig it!

A historic event took place last week in the world of English wine. Taittinger became the first Champagne House to plant vines in UK soil and as you would expect, the launch was carried out in style.

Continue reading
476 Hits

Grape British Diplomacy

This week, Nusrat Ghani MP (Con, Wealden) put forward the industry’s case for serving English wine at UK overseas missions to Parliament. The 10 Minute Rule Bill aims to ensure British embassies and consulates overseas purchase and serve English and Welsh wine and sparkling wine at events and functions. WSTA Parliamentary Affairs Manager, Rebekah Kendrick, highlights the value that MPs’ support brings to the UK’s wine businesses.

Continue reading
565 Hits

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.

Continue reading
503 Hits

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:

Continue reading
798 Hits

Don’t let anyone tell you that Brexit has either ruined our economy or saved it

Ciaran Myles, Research, Marketing & Insights Manager, WSTA 

 



As we edge further along the Brexit timeline with limited and, at times contradictory information coming from Government, discontent from both Brexiters and Remainers alike, an ever-watchful press and volatile world markets, one thing remains constant: the world keeps turning. By this I mean that despite all the political white noise, someone has to get on with looking at how the country and the economy are performing. Whilst the old adage ‘lies, damn lies and statistics’ may ring true in parts of Westminster, the likes of the ONS, the OBR and the Bank of England continue to crunch the numbers.

Continue reading
804 Hits

The Spirits Summit, Unwrapped

 

As if we weren’t cold enough in London as it is, WSTA decided to head north once again to the Packaging News Spirits Summit in Edinburgh.

 In its inaugural year, the event was showcased in the beautiful Assembly Rooms on George Street, where chandeliers hung from the ceiling above boxes, bags, glass, cases and corks – a packaging-enthusiasts paradise if you will.

 The room buzzed with chatter as delegates made their way around the stalls to explore some of the industry’s cutting edge creations. The packaging industry could easily be mistaken for dull, but packing businesses from across the world were proving how this was clearly not the case (excuse the pun!).

Continue reading
742 Hits

Creating safer communities – CAPs

Creating safer communities – CAPs

Creating safer communities – CAPs help bring about real progress through partnership

Director Kate Winstanley talks about the success of CAPs in tackling underage drinking and the associated harms to communities following the publication of the Community Alcohol Partnerships (CAP) 2016 Impact Report.

On Monday 14th November Community Alcohol Partnerships (CAP) hosted an awards ceremony to honour the efforts of a number of exceptional individuals whose contributions to their individual CAPs have made a real difference to reducing underage drinking and building safer, more cohesive communities.

 It was an incredibly uplifting evening which shone a light on how working together can make a real difference to people’s lives.

 

Continue reading
788 Hits

Women With Bottle - the women behind the wine & spirits industry, Rebekah Kendrick

8th November 2016

Our Parliamentary Affairs Manager is a front line advocate for women in the wine & spirits industry, demonstrated at our recent UK Parliament event.

“If you google the phrase “Master Distiller”, the first 39 images are of men - often slightly more matured, accompanied with a beard, scrutinising a glass of whisky. Likewise, considering what a chemist carefully testing the agricultural conditions for growing grapes might look like, may have you jump to the conclusion of a man.

Continue reading
746 Hits

Christina McKelvie, MSP on Scotland’s gin industry

The WSTA recently hosted a reception in the heart of Edinburgh at the Scottish Parliament. Kindly sponsored by Christina McKelvie, MSP, the event was a unique experience to learn about Scotland’s gin industry. Representing the Hamilton, Larkhall and Stonehouse constituency, Christina gives her thoughts on the industry’s contribution.

Continue reading
736 Hits

The Government’s Plan of Action to boost UK Food and Drink exports

 

Trade Veteran and International Affairs Director at the WSTA - Louise Foxwell welcomes the UK Government’s International Food and Drink Action Plan

The WSTA is a supporting partner of the UK Government’s Action Plan. We have always worked hard to identify target markets and help our members to succeed in selling their goods overseas.

 “The UK has in the past been reluctant to shout about the excellent drink and food it has to offer. We are extremely proud of working with government to highlight the quality of our great English wine and British spirit products. There is a massive appetite for English wine and British spirits overseas and it is vital we look at ways of targeting new markets which will allow industry to fulfil its export ambitions.

Continue reading
671 Hits

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.

 

Continue reading
964 Hits

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.

Continue reading
740 Hits

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.

                                              b2ap3_thumbnail_IMG_0724.JPG

 

 

Continue reading
1544 Hits

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:

 

b2ap3_thumbnail_blog-snap.jpg

 

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.

 

 

Continue reading
3277 Hits

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

b2ap3_thumbnail_lorry-for-blog-piece.jpg

 

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.

Continue reading
1331 Hits

ENGLAND AND AUSTRALIA CLASH IN WINE-TASTING RUGBY WORLD CUP

b2ap3_thumbnail_nat_rugby_wine_tasting_44-2.JPG

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.

b2ap3_thumbnail_nat_rugby_wine_tasting_34.JPG

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.

b2ap3_thumbnail_nat_rugby_wine_tasting_46.JPG

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. 

Continue reading
1893 Hits

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.

Continue reading
1414 Hits