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The Grapevine

The WSTA's views, distilled.

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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WSTA launches online guide to drinks’ calories

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The issue of calorie content is one that is on the news often in recent months and is one that is being considered and discussed both nationally and within the EU. The WSTA will be feeding into this debate and looking to ensure that, should EU- wide rules be proposed, an agreement is reached that is right for UK consumers. However, as with most EU negotiations, this may not materialise for some time.

 

While these discussions are on-going the industry itself has been looking at how it can support the efforts to promote greater consumer awareness, and this has included some producers and retailers taking action voluntarily with their own labelling. These are positive steps, but as an industry we also recognise that consumers consume their information in many different ways, just like their drinks.

 

The Wine and Spirit Trade Association has joined in too. While we don’t produce anything to label, we have published an online guide to average calorie content of drinks in order to help drinkers understand more about their calorie in-take. This is a quick reference guide that helps users to understand what they are likely to be consuming and the figures are averages values taken from generally accepted data and are given in standard measures as found in UK pubs.

 

It is not always possible to give precise values for individual products as there will be variation within a category (particularly wine) for example if lower in alcoholic strength or higher in sugar. But the page is aimed at giving a broad picture of the calories found in a range of standard products.

 

The figures are based on McCance and Widdowson’s “The Composition of Foods Integrated dataset”, data from responsible drinking.eu and The Brewers of Europe and builds on the work undertaken by others on this issue including Drinkaware ( see https://www.drinkaware.co.uk/check-the-facts/health-effects-of-alcohol/appearance/calories-in-alcohol ) as the industry looks to do what it can to provide more information to consumers in a variety of different ways.

 

 

The WSTA Calorie Guide is available on our website here: http://wsta.co.uk/resources/calorie-counter

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Guest Post: Behind the Scenes at The Benevolent Ball

The WSTA are supporters of the industry charity, the Benevolent, who support current and former members of the industry in times of need. The following post follows their gala event, The Benevolent Ball, earlier this month.

For one night only

After weeks of preparation, time and effort, it is back to reality for Team Benevolent. Following the execution of our charity’s biggest event of the year we are suffering the inevitable post ‘Benevolent Ball blues’ and slightly sad that it’s all over. The sumptuous surroundings of The Dorchester become Benevolent HQ for the day and we all arrive early in the morning to spend the day setting up and prepping for the evening ahead.  The Benevolent Ball is the largest and most profitable event in our calendar with 300 attendees each year and is a significant undertaking for our team of 5 from Head Office. There is a huge amount of preparation that needs to happen months in advance; from creating the invites, designing the brochures, sourcing helpers, booking suppliers, securing auction prizes, preparing table decorations, fundraising logistics, sourcing music and entertainment, the list goes on and on. 

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Setting the scene

Before David Cox, The Benevolent’ s Chief Executive, could take the stage on Thursday evening there were countless boxes to unpack, brochures to be laid, and dozens of other tasks to be crossed off the list.  The venue was a true work in progress early Thursday morning as the fun and chaos began, and people arrived on the scene. Helpers and staff could be seen outside the Ballroom assembling over 220 prizes for the Tombola, sorting through pallets of wines and merchandise and making up various luxury hampers. With more than 30 tables seated for 10 guests the team had their work cut out.  It took all day for us to dress tables, carry out the sound check and then lay out the 300 place cards. Even small details like placing party poppers and rocket balloons by each setting cannot be forgotten (we have mixed feelings about this task as we live in fear that an overly enthusiastic guest will set off a rocket balloon during David’s very well thought out and carefully written speech!).  

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Serving up style

The devil is in the detail when it comes to making a black tie event really stand out. The elegant surroundings, white crisp linens, sparkling silverware and the Salons des Champagnes help by creating a lovely ambiance. And with four Grande Marque Champagnes to choose from during the Reception we hope that all our guests feel just a little bit spoiled for choice! Another key element of ensuring the evening is a success is choosing the right four course meal to be prepared by amazing chefs at The Dorchester. This year 300 cheese soufflés were delivered all in one go, that is service at its best!  Nothing worse than a deflated soufflé, which at this point of the evening my heart can feel like!  After dinner we had the Live Auction, with the top prize of tickets to see U2 play at The O2 in a corporate hospitality box and arrival and collection in a chauffeur driven Bentley. The inimitable Andrew Cox, (David’s brother) worked really hard, holding the attention of 300 very noisy guests, and speedily got top bids like no other auctioneer.

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One of my favourite parts of the night, was the photo booth including a make up artist with the theme of ‘zombies and pirates’, this included several key industry figures having their face painted too!  All of a sudden The Ball had a slight Glasto feel to it, with many key figures turning a bit flower power hippy on me – and face paints galore!

The Benevolent Ball Cocktail Bar had some fantastic cocktails, whilst guests networked and played on the casino.  Ewan Murray’s band ‘Chapter Eight’ performed various hits, and well known characters started to cut some serious shapes on the dance floor! It was at this point during the evening that I could finally take a breath and enjoy our guests’ wonderful reactions to the various after dinner activities. I have to say that seeing so many of our wonderful trade having a great evening makes all the hard work worth it!

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Thank you

I want to send out a very big thank you to all those who supported the event.  With your help we raised over £40,000 for drinks industry colleagues facing serious medical or financial hardship. We really could not have done it without you. I also want to send out a special thanks to everyone involved behind the scenes, David and the helpers, not forgetting the Team at Benevolent HQ; you all do an absolutely superb job – go Team Benevolent, and roll on The Benevolent Ball 2016!  

 

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Recent comment in this post
Guest — andrew cox
It was a blast and you all worked your socks off! Tip top Events team! Take a bow!
Wednesday, 25 March 2015 13:11
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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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WSTA’s independent streak

I was delighted to be invited to be a panellist at the Harper’s March for Independents event held yesterday.

It was fascinating to hear about the range of business models and different types of diversification, including food offerings, wine clubs, buying groups and on-line retailing.  I think fellow speaker Angela Mount (MW) summed it up when she said it wasn’t enough just to be passionate about wine.

Our panel was looking at new ways for independents to change their business and increase profit.  Hal Wilson (Cambridge Wine Merchants) looked in detail at some of the ways to use in-bond purchases, duty deferment accounts and guarantee exemption schemes to delay the time when excise duty has to be paid, aiding cash flow and profit margin.

I used the opportunity to remind the participants about the obligation of excise traders to be able to demonstrate “due diligence” to HMRC in their business dealings.  Even if a retailer mangers to escape the requirement to demonstrate due diligence themselves, they can expect their wholesalers and suppliers to be required to do so and to undertake regular checks to ensure that their business relationship is on a sound footing.  Moreover, it makes good commercial sense to have robust due diligence processes.

I also spoke about the proposed Alcohol Wholesaler Registration Scheme.  We are expecting this to be introduced in the Finance Bill.  Even retailers who only have small wholesale exposure (beyond the merely “incidental”) will have to register and, when purchasing from UK wholesalers, will have to make sure that their wholesaler is validly registered.  Retailers will need to have processes to check that their wholesaler’s registrations are valid on a regular basis and this links in with the sort of checks that would be expected as part of due diligence.

In some cases, if a trader fails their wholesaler application, their other excise registrations will be at risk, so their whole business is potentially at stake. Failure to comply with the scheme could lead to civil penalties or prosecution. 

The regulatory landscape is particularly active – traders of all kinds will need to remain alert to developments.  This is an area where the WSTA’s knowledge and access to government departments is particularly helpful to members.

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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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