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WSTA calls for temporary suspension on wine tariffs to prevent prices rocketing in the event of a No Deal Brexit

The Wine and Spirit Trade Association is calling for clarity from Government on its post no deal tariff plans, warning that any no deal Brexit will see wine prices hit an all-time high.

In the event of a no-deal Brexit the WSTA believes that a temporary suspension on all wine tariffs for 6-12 months would massively reduce the strain on the supply chain that a no deal Brexit will inevitably bring about. It argues that there would be minimal impact to Treasury coffers and probably cost much less than having to introduce a system for collection of tariffs on products that currently enter the UK tariff free.

Currently an average priced bottle of still wine costs £5.73. If the UK crashes out of the EU without a deal tariffs on EU wines alongside a planned duty increase on 1 February would add an extra 20p to the price of a bottle.

In the absence of any certainty from Government and in a bid to try and keep shelves stocked and wine prices down wine importers across the country having to stockpile wine.

Direct Wines are bringing in an additional 2 million bottles, about a 40% increase, on their usual stock. And Bibendum PLB (as part of C&C) say they have developed a “robust Brexit plan” which will see them ordering “significant” extra wine to have ready in stock. Majestic Wine reported last year that they will hold another 1.5 million more bottles of European wine as part of emergency planning.

The WSTA has been advising members for over a year that they should increase their stock by 20% as a starting point in case of a no deal Brexit.

Miles Beale Chief Executive of the Wine and Spirit Trade Association said:

“Since the Referendum, the WSTA has campaigned consistently for a deal with the EU that delivers frictionless trade in goods, with no additional tariffs or costs.
If the UK ends up with a no-deal Brexit then wine businesses will have to cope with additional tariffs as well as another duty rise - which is highly likely to end up full square in the consumer’s lap, bumping up wine prices to an all-time high.

We are calling on government to clarify their tariff plans now and - in the event of a no deal Brexit - to commit temporarily to imposing no tariffs on wines for at least 6 months. This would be a pragmatic solution with any loses to the Treasury covered by not having to implement a costly new system. It also leaves intact government’s ability to remove tariffs on wine permanently – but as part of a future free trade deal.”

Currently there are no tariffs on wines from the EU, Chile and South Africa. A no deal Brexit would result in the introduction of tariffs estimated to cost UK wine importing businesses over £100 million a year.

The introduction of no deal Brexit tariffs would be a double blow for wine businesses after the Chancellor elected to single wine for a duty rise at the Autumn Budget. From February 1st duty on a bottle of wine will go up 7p. Add a tariff to the duty rise and VAT this means an average priced bottle of wine, which today costs £5.73, will cost £5.93 in the event of no deal. An extra 53p a bottle more than consumers paid before the referendum result when an average priced bottle of wine was £5.40.

For sparkling wine, which is taxed at an even higher rate, an average priced bottle currently costing £7.14 will go up 37p to £7.51.

The WSTA warns that a no deal Brexit would also mean the loss of access to the EU’s Excise Movement Control System (EMCS) which tracks alcohol coming in and going out of the country documenting consignments electronically.

EMCS allows alcohol to and from the EU to be moved on with no extra checks, without it ports are likely to descend into chaos.

The WSTA last year launched its #NoToNoDeal Campaign - www.dontbottleit.co.uk, which sets out exactly why passing a deal with the EU is so crucial to the prospects of the UK’s world leading wine and spirit industry.


Liqueur sales surge in Britain’s shops and supermarkets

Sales of liqueurs in our shops and supermarkets have been boosted as UK consumers expand their drinks cabinet collection to keep up with the cocktail craze.

The latest sales figures taken from the Wine and Spirit Trade Association’s market report shows that during the heatwave of 2018 Brits bought over 4 million bottles of non-cream liqueur cocktails from our supermarket’s and shops. Astonishingly the sales are up 56% on the same 12 weeks last year, the equivalent of an extra 1.4 million extra bottles.

The surge in sales of liqueurs was helped by the unusually long hot summer and consumers becoming increasingly keen to copy drinks enjoyed on a night out as growing numbers of restaurants and pubs offer a cocktail menu.

This summer saw an explosion in popularity of herbal bitter liqueurs and red-orange aperitif’s mixed with sparkling wine. These drinks served in pretty stem glasses proved very Instagrammable and consumers were keen to share their snaps of the vibrant, colourful cocktails on social media.

According to CGA data 74% of UK bars now offer cocktails and 98% of consumers who buy cocktails chose them when they are on promotion in happy hours or on two for one deals.

The liqueur category, which also includes cream liqueurs more traditionally drunk neat or on ice, has grown as a greater variety of products have been introduced to the market.

Cream liqueur sales in shops and supermarkets were the equivalent of 1.7 million bottles, a 33% increase on the same 12 week period in 2017.

When you add the recent sales boom in the off trade to sales of liqueurs in our pubs, bars and restaurants it shows that Brits bought the equivalent of over 42 million bottles of cream and non-cream liqueurs worth £1.2 billion in the last recorded 12 months.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:

“In the past liqueurs have often been overlooked in the spirits category but the WSTA market report shows a surge in sales in the UK’s shops and supermarkets in 2018. This is partly down to Britain’s long hot summer when tall cocktails over ice were a welcome relief in the heatwave. But the liqueurs boom has also been influenced by people sharing cocktail creation trends on social media with consumers keen to recreate these drinks at home.”

Gin is in the pink after heatwave sees sales almost double in two years

Gin sales in the UK have reached another record-breaking high helped by this summer’s heatwave, world cup fever and by Millennials discovering their love for new pink and flavoured gins.

The Wine and Spirit Trade Association’s end of year market report shows a massive boost in gin sales over the summer taking the total sales value to over £1.9 billion.

Over 66 million bottles of gin were sold in the UK in 12 months, up 41% and over 19 million more bottles than the same period last year.

More gin was sold during three months of the 2018 heatwave, when the equivalent of almost 28 million bottles were bought, than the summers of 2014 and 2015 combined, which saw almost 27 million bottles sold over the two summers.

This quarter saw gin grow 53% by volume and 59% by value, compared to the same period in 2017, the largest growth by quarter on record for gin and the first time a spirit has seen growth of over 50%.

And it was in Britain’s pubs, bars and restaurants that gin saw the largest growth in value sales where for the first time in a 12 month period sales passed £1 billion, with over 56% more gin sold than last year.

So many gins were served over the bar, in the last recorded 12 months, the gin category has jumped two places in the spirits leader board. It is now the second most popular drink sold in the on-trade, behind vodka, overtaking whiskies and liqueurs for the first time.

A huge part of the gin surge, this year, has been down to sales of pink and flavoured gin as Britain has seen hundreds of new products coming onto the market.

The latest data shows that flavoured gin has driven over half of all growth in gin in the last recorded 12 months, despite only making up one fifth of total sales. Almost three quarters of the flavoured contribution to gin’s growth has been driven by pink gin.

Flavoured gin alone brought in £165 million during this time up a whopping 751% on the same period last year.

Research has shown that the explosion in the flavoured and pink gin category comes down to its appeal to consumers under 45.

The category is expected to continue to grow in 2019 as brands are set to launch new flavoured and pink gins on to market.

According to HMRC we exported £532 million worth British gin this year which is expected to grow even more in 2019 adding to the value of the gin category.

Miles Beale Chief Executive of the Wine and Spirit Trade Association said:

“Gin is once again breaking records helped by our innovative distillers who have introduced an exciting array of new flavoured, pink and more traditional gins this year. The popular new products combined with a fantastic long hot summer and the excitement of the World Cup has helped boost the category beyond all predictions. It was only a few months ago that we announced that gin sales at home and abroad had broken the £2 billion mark. Our latest Market Report shows that sales of gin in the UK alone is just shy of the £2 billion. It seems we may have been a bit premature hailing 2016 to be the ‘Year of Gin’. Just two years later we’ve almost doubled sales of gin. 2019 will have to be crowned the year when gin was in the pink.”

Warren Scott, CEO and Co-Founder of Quintessential Brands, one of the largest suppliers of gin in the UK and International Spirits Challenge Gin Distiller of the Year 2018, comments:

“It’s fantastic to see the nation’s love affair with British Gin continuing as the category diversifies. Right now, we’re seeing more interest and engagement in gin than ever from consumers – those who are new to the category as well as those more seasoned gin drinkers who want to experiment with flavoured gins or splash out on more premium gins.

“As owners of the UK’s foremost gin distillery - G&J Distillers in Cheshire - our expert distillers bring a lifetime of experience and skill to creating new and exciting gins that consumers can enjoy at home or out on the town; the recent success of premium gin brands with an innovative twist, such as BLOOM Gin - with its Jasmine & Rose Pink Gin, which flew off the shelves when we launched it this summer - shows that consumers are intrigued by these new gin flavours which can only be good news for the UK’s gin producers and the long term health of the category.

“Whilst such innovation is key to driving interest in British gin, it’s important to recognise the longstanding gin heritage we have in this country and the enduring popularity of classic gins. Whilst the last year has seen a huge surge of interest in new styles and flavours of gin, the majority of gins that we’re drinking today are actually based on a style dating back to 1761, when the Original London Dry Gin was created by an enterprising young man named Thomas Dakin. That very same gin, Greenall’s, is still produced in exactly the same way by G&J Distillers, and it remains one of the best-selling gins in the world today.

“The run-up to Christmas has been busier than ever as we pull out all the stops to meet demand for the festive season. It’s certainly a golden era for British Gin right now and I’m confident this success will continue in the years ahead.”

Fizz sales hit a record high in 2018

Sales of sparkling wine and Champagne, combined, reached a record high this year when Brits bought almost £2.2 billion worth of fizz.

The Wine and Spirit Trade Association’s latest market report shows that almost 165 million bottles of sparkling wine and Champagne were sold in the UK in the last recorded 12 months.

A record £1.5 billion, the equivalent of 146 million bottles, of this was from sales of sparkling wine alone.

And supermarket wine buyers are reporting a boost in sales of Crémant, a French sparkling wine, this festive season.

The UK’s sales of sparkling wine have enjoyed rapid growth in the last decade, however more recently the category’s growth is slowing. Despite this 2018 still saw more sparkling wine sold in the UK than any previous year.

Combined sales of sparkling wine and Champagne have almost doubled in volume and value in the last five years.

In 2013 Brits spent around £1.2 billion on fizz compared to the £2.2 billion bought in the same 12 month period this year.

The popularity of fizz has helped to boost the English wine industry which this year saw a record harvest following near perfect growing conditions following the 2018 heatwave.

Last year around 5.9 million bottles of English and Welsh wine were produced by vineyards, this year’s harvest is expected to exceed 6 million bottles.

The Ridgeview estate in Sussex was last month awarded the coveted trophy of the world’s best winemaker in the International Wine and Spirit Competition. This is the first time in the IWSC’s 49-year history that the award has been presented to an English producer.

The sparkling wine category includes Prosecco, Cava, Crémant and English sparkling wine amongst others all of which have found their way into supermarkets and onto drinks menus in bars across the UK.

The lion’s share of sparkling wine sales in the UK is from Prosecco, however the growth in sales of Prosecco has slowed markedly, with drinkers exploring other fizz offerings.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:

“Fizz is traditionally enjoyed over the Christmas holiday period and 2018 looks to be another sparkling success for wine makers. UK consumers now have a far greater range to choose from than ever before, including world class English sparkling wines, Cava’s, Prosecco and Crémants. But to allow consumers to continue to enjoy a wide range of quality sparkling wines, the government cannot allow a ‘No Deal’ Brexit which will stifle trade and limit choice. The greatest gift for sparkling wine lovers this Christmas is a deal which allows for frictionless trade without tariffs.”

Becky Hull Master of Wine and Wine buyer at Waitrose said:

“We predict Crémant will be particularly popular during Christmas 2018. We've seen continued growth over many years and definitely expect that trend to continue. Crémant offers brilliant value for money so it's enjoying well deserved success.”

A spokesperson for Marks and Spencer said:

“So far it’s been a great festive season for fizz, a couple of highlights from us; Cremant continues to really gain in popularity as customers discover it’s great value and quality, and sales are actually up an impressive 300% on the year! Prosecco isn’t going anywhere and overall our Prosecco sales are up 47%, as customers have enjoyed some great deals on our Prosecco this festive season.”

UK wine industry tells government you’re “letting us down”

On the back of a Budget that penalised wine and with the Government stepping up planning for a ‘No Deal’, the Wine and Spirit Trade Association met with Treasury Minister Robert Jenrick to voice industry concerns over duty hikes and Brexit fears.

The Chancellor was able to deliver some good news for spirit makers at the November Budget when he froze duty however, he chose to unfairly single out wine for a 3.1% RPI increase.

With the duty increase kicking in on 1st February this will inevitably lead to consumers seeing wine prices rise. Duty on an average priced bottle of wine will increase by a further 7p for still wine, 9p for sparkling and 9p for fortified wine. These numbers do not include VAT which will add a further 20% to these increases.

At the meeting between the WSTA senior team and Mr Jenrick on Monday (17th Dec) he was warned that duty hikes combined with a potentially disastrous ‘no deal’ Brexit paints a bleak picture for wine importers who have already been hit hard by the fall of the pound post referendum.


Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:

“I met Robert Jenrick and told him that Government’s decision actively to single out wine for an increase at October’s Budget was a bitter blow to UK wine importers, who have already been hit hard by the devaluation of the pound. The UK wine industry has grave concerns over unfair duty rises, made worse by the prospect of a ‘no deal Brexit’.

Like most of the British business community, the wine and spirit industry would support any government proposal that met our requirements and that was likely to gain a majority in Parliament. Of the PM’s options that rules out ‘no deal’ and her current deal. And her third option - No Brexit - isn’t on the menu. Yet.

And, frankly, it’s the lack of feasible options - or any prospect of them until the new year - that is unacceptable for businesses trying to prepare for the future. The clock is running down, the government is letting us down and on top of this has chosen to punish unfairly wine and wine consumers with a duty rise. It would be laughable if it weren’t so serious. And decisions should certainly not have been put off until January.”

Since 2010 wine has been treated more harshly than other categories of alcoholic drink – +39% increase compared to +27% for spirits and 16% for beer.

This is despite proof that a freeze can benefit both the Treasury and UK businesses. Following the freeze in wine and spirit duty in the November 2017 Budget, between February to August 2018, wine duty income increased by £39 million, up 2% on the same time last year.
The WSTA team highlighted to Mr Jenrick the trade’s major concerns that Treasury forecasts, using OBR modelling, is based on flawed numbers and an underestimation of the elasticity of price increases on consumer behaviour.

Before the referendum result an average priced bottle of wine sold in the UK was £5.40, the latest figures from the WSTA market report reveal that an average priced bottle of wine has reached £5.73. From February 1st when wine duty increases wine prices are likely to rise again.

The WSTA launched it’s #NoToNoDeal Campaign last month telling Westminster “don’t bottle it” when it comes to delivering a Brexit deal - www.dontbottleit.co.uk

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