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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


Neil Coyle MP Announced as new Chair of Wines and Spirits APPG

Neil Coyle, MP for Bermondsey and Old Southwark, has been announced as the new Chair of the All-Party Parliamentary Group (APPG) for Wines and Spirits.


Neil replaces Tim Loughton MP, who stepped down last month having led the group since 2014, having overseen growth in membership of the APPG to its largest number of members since it began.

At the most recent APPG AGM, Coyle, who has been MP for Bermondsey and Old Southwark since 2015, was elected to serve as Chair, and will assume the role immediately.

Coyle’s constituency is a hub for the UK wine and spirits industry. There are at least 3 distilleries across Bermondsey and Old Southwark, and the headquarters of several wine businesses as well as industry charities and merchants.

The Wine and Spirit Education Trust, known throughout the world as the leading educators in wines and spirits, are located in his constituency, as are the Institute of Brewing and Distilling, the charity Community Alcohol Partnerships, and the WSTA – so Neil is a natural fit for the role of Chair.

The WSTA acts as secretariat to the Wines and Spirits APPG and has worked closely with the group over the years by raising the profile of the industry and securing several freezes in wine and spirits duty – most recently for a freeze to spirits excise duty in the Budget last month.

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


“I am delighted to welcome Neil Coyle MP as Chair of the Wines and Spirits APPG. The WSTA works closely with the APPG throughout the year and I’m sure Neil’s enthusiasm for his new role will be hugely helpful. I’d also like to thank Tim for his 4 years of service as Chair of the Group.

“2019 will be a crucial year for wines and spirits – the shape and form of Brexit is still, at this very late stage, unclear, and that is providing an enormous amount of uncertainty for business. Whilst the treatment of spirits at the Budget last month was welcome, wine is still the subject of grossly unfair treatment by the Chancellor, and wine companies in particular have no more left to give as he continues to squeeze businesses in the sector for tax revenue.

“The efforts of the APPG will be vital if we are to undo some of the damage done, both at the Budget in October and as a result of Brexit, and I’ve no doubt Neil, in his role as Chair, will be more than up to the task.”

Neil Coyle MP, APPG Chair, adds:


“I’m delighted to have been elected as Chair of the Wines and Spirits APPG. It’s a crucial time for the wine and spirit industry and I start in my new role as a welcome freeze in duty for spirits was announced at the Budget, whilst wine saw a rise in duty in line with RPI inflation.


“The wine and spirit industry in the UK is hugely important – supporting around 473,000 jobs and contributing £49 billion in economic activity. I look forward to working with colleagues on both sides of the House, and with the WSTA in their role as secretariat, furthering the cause of trade, jobs, and economy for the industry in the coming years.”

 

WSTA launches #NoToNoDeal Campaign – ‘Don’t Bottle It’

On the back of the Prime Minister’s call to “listen to business”, the Wine and Spirit Trade Association has today told Westminster “don’t bottle it” when the Government’s Brexit deal comes to Parliament, with the launch of its #NoToNoDeal campaign.

There are major concerns across the wine and spirit industry that we are still in danger of ending up with a disastrous ‘no deal’ Brexit.

Since the Referendum, the WSTA has campaigned consistently for a deal with the EU that delivers frictionless trade in goods, sufficient labour supply and a transition period that lasts until at least 2020. Before the end of a transition period, the UK must secure an ambitious free trade agreement with the EU which allows the UK to seek similarly ambitious trade deals with other parts of the world.

With continued membership of the EU off the table, the UK Parliament’s deliberations on the government’s proposed deal must deliver these outcomes, or the UK must go back to the negotiating table. But ‘no deal’ must explicitly be ruled out as the worst possible outcome - whether by design or by default.

For those businesses who have not formed - or been able to afford - a back-up plan for a ‘no deal’ Brexit, time has run out.

As part of the campaign, the WSTA is urging wine and spirit businesses to write to their MP, telling them that a ‘no deal’ Brexit scenario is unacceptable and that were the UK to leave the EU without a deal, their business would suffer as a result.

The WSTA has also launched 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.

The industry’s ties with the EU run deep – 55% of wine consumed in the UK is imported from the EU, whilst 45% of spirits exported from these shores is sent to the EU.

Crashing out of the EU with a no deal scenario would cause delays at the border, restrict movement of people, exacerbate significant cashflow challenges for businesses, especially SMEs, and create massive uncertainty for both businesses and consumers - an outcome the WSTA deems totally unacceptable and unnecessary.

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

“The UK wine and spirit industry is a world leading £50bn industry which does half of its trade with the EU.

With the launch of our ‘Don’t Bottle It’ campaign, our message to Parliament is that ‘no deal’ is totally unacceptable. It would fail to deliver what we have asked for consistently since the Referendum and there is now simply not enough time to prepare for a ‘no deal’ Brexit without causing serious damage to UK businesses. As we have said since the Referendum, the clock is ticking, and it has now all but run down.

“Despite the businesses we represent putting in place contingency measures as best they can, a ‘no deal’ Brexit presents a multitude of difficulties which are outside of their control. Leaving the EU without a deal would result in chaos and inflict painful damage on these businesses.

“We are calling on Parliament to ensure the UK does not leave the EU without a deal on 29 March 2019 - #NoToNoDeal.”

 

WSTA takes British gin and English wine to Tokyo

The Wine and Spirit Trade Association (WSTA) led a mission of Great British gins and fine English wines to Tokyo this week to showcase the quality of a British export products and to boost exports.

The WSTA arranged for producers to show a range of British gins and English wines in Tokyo over 3 days (27th – 29th November) to capitalise on the increase thirst for British produce overseas.

This was the WSTA’s second trade mission to Japan in two years, with Tokyo a priority destination as one of the fastest growing markets for UK Food and Drink exports.

The British Embassy welcomed winemakers and distillers from the UK on day one for a briefing on the Japanese alcohol market from its staff, a journalist and a retailer. The second day saw the Embassy open its doors to a ‘Meet the Buyer’ event with invited guests. On the final day prestige British car maker Aston Martin hosted at its offices wine and then gin tastings for sommeliers and mixologists.

Over the two tasting days four English sparkling wines and products from ten different gin distillers were showcased to a full range of buyers, importers, journalists and influencers - all of whom were keen to quench their thirst for all things ‘Brand Britain’.

The WSTA’s second foray into the Japanese market comes on the back of HMRC figures released earlier this year showing UK gin exports for 2017 broke the £500 million barrier for the first time, reaching a record breaking £530 million.

Gin exports to Asia and Oceania totalled £32 million in 2017, with over £7 million worth of British gin going to Japan.

Wine, meanwhile, saw exports total £550 million from the UK, including over £250 million to Asia and Oceania.

Wine exports from the UK to Japan, were worth over £9 million in 2017.

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

“It’s been a great few days here in Tokyo. We have been able to work with the British Embassy team to put our great British gins and English wines in front of journalists, buyers and importers - capitalising on the love for ‘Brand Britain’ overseas.

“The interest shown here is a fantastic boost for the UK drinks industry and a great way to end a successful 2018. This year has proven to be a corking year for English wine, with near perfect growing conditions leading to a record breaking harvest.

“British gin has grown into a global phenomenon and in 2018 we saw sales, both home and abroad, break the £2 billion mark – doubling in value in five years. More and more nations are clamouring for the sought-after spirit with more than 150 countries now importing British gin, making us the world’s leading gin exporter.

“We have been proud to share these products and, as we continue to campaign for our government to seal the right Brexit deal, we look forward to greater support to increase British gin and English wine exports to developed markets such as Australia, Japan, China and the US.

“The removal of tariffs would allow Britain to maintain its position as the world's largest spirits exporter and further boost the UK economy, providing more jobs.

“Ambassadors and senior diplomats can start supporting our mission to help British gin and English wine exports grow even further by committing to ‘Serve British’ at events both home and abroad."

The WSTA has recently held events in embassies in Copenhagen, Tokyo, Madrid and Hong Kong and will hold more events at official residencies overseas in 2019, in a bid to encourage exports and showcase the incredible quality of British gin and English wine.”

WSTA appoints two new Board members

The Wine and Spirit Trade Association has fortified its board as it concentrates increasingly on supporting import and export in a new era of trading.

Ahead of the new trading landscape it has invited both a global wine giant and one of the UK’s leading craft distillers to take a seat around the table.

Paul Sorrentino, a Vice President/General Manager, Europe, Middle East and Africa for E&J Gallo, and Daniel Szor, founder of Cotswolds Distillery, attended their first WSTA Board meeting in October.

Paul’s appointment brings into the fold a key player at E&J Gallo, the world’s largest family-owned winery and biggest importer of US wine to the UK.

Daniel takes his place as the first small distillery owner to join the WSTA Board table. His appointment boosts the input from our domestic producers and follows on from English vineyard boss Tamara Roberts taking a seat at the Board last year.

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

“The WSTA continues to fortify its Board team and I am delighted to welcome both Paul and Dan. We represent the big and the small bringing together domestic and international players in the wine and spirit trade.

“Each member of our Board brings to the table a different set of skills that means the WSTA can cover every issue facing this diverse sector. The WSTA is doing more than ever before for its members and the industry in these uncertain and testing times.”

Paul Sorrentino joined the E&J Gallo Winery as a sales representative for a distributor in Chicago, Illinois.  Since his start in 1997, he has held various sales leadership roles in the US across multiple states. 

While most of his career has been spent living in Chicago and NYC, Paul has been involved in the commercial business for Gallo in 13 different states spanning the Midwest, Central and Northeast regions.  His experience involves both retail and on-premise sales of Gallo’s growing and evolving portfolio of wines and spirits. 

In 2017 and after 20 years’ experience with the US business, Paul moved with his wife and two children to London to lead Gallo’s business across Europe, the Middle East and Africa.

Daniel Szor was born and raised in New York City and has spent most of his professional life living in Paris and London, specializing in the sales & marketing of currency investment management services.

He was a member of senior management of New York-based Currency Manager FX Concepts for over 25 years, setting up and running offices for them in both Paris and London. 

It was during his years in Paris that Daniel was first bitten by the whisky bug. Years later, while living in London Daniel and his wife purchased an old farmhouse in the North Cotswolds and gradually fell in love with this most beautiful corner of Britain.

Aware of the phenomenal growth in craft spirits in the US, Daniel decided to combine his love of whisky and the Cotswolds by creating the first-ever full-scale distillery in the region, with a focus on premium small-batch gin and single malt whisky made with local ingredients. His Cotswolds Distillery is now one of the fastest-growing premium spirits brands, thanks to their award-winning spirits which are now sold in over 30 countries.

Dan Jago, Chairman of the WSTA, comments:

“I am very pleased to welcome both Paul and Daniel to the Board. Their wealth of experience in two different fields brings a nice balance which will strengthen the WSTA board.

Paul’s extensive knowledge of the global wine industry and expertise in the world of wine importing is a tremendous asset to the Board. Equally, Daniel’s entrepreneurial eye and huge successes in the spirits trade will add two important voices to the WSTA boardroom.

I look forward to working with Paul and Daniel, and the rest of the Board moving forward into 2019.”

Paul Sorrentino, a Vice President for E&J Gallo:

“I’m honoured to be chosen to serve on the board at the WSTA. Working alongside other industry leaders to further the great work be done by the WSTA is an exciting opportunity that I am looking forward to be a part of.”

Daniel Szor founder of Cotswolds Distillery:

“I was delighted to be asked to join the WSTA Board earlier this year. Britain’s SME craft distillers will be at the forefront of exploring new trading opportunities post-Brexit, and I’m looking forward to helping the WSTA and its members prepare and then take advantage of new trading arrangements.”

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