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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 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.”

UK Wine Industry Tells Chancellor: ‘Show your Support’

The Wine and Spirit Trade Association has urged the Chancellor to consider the huge contribution the UK’s wine industry makes to the economy when he delivers his Budget statement next week.


Britain’s wine importers, bottling plants, distributors, retailers and logistic companies employ around 170,000 people, and in 2017 paid almost £4.7 billion in duty payments to the Treasury, more than any other alcoholic drink.


This substantial figure is only set to increase as Philip Hammond plans to raise the rate of duty by around 3.4% in his Budget statement next week.


The WSTA argues that the planned increase would further undermine an industry that is already facing a tough trading landscape, following the impact of the anticipated Brexit fallout on the pound, and rising inflation.


The UK wine industry is the second largest global importer of wine, both by volume and value, with 99% of wine consumed in the UK being imported.


The wine industry is therefore uniquely exposed to the risks associated with a badly managed Brexit, and the Government must do all it can not to compound pressure on the trade - the WSTA is asking the Chancellor not to inflict a painful rise in duty on business and consumers next week.


Despite the vital contribution of wine duty to Government coffers, and the abundance of employment the sector supplies, the Government has too often failed to support the UK’s wine industry.


Since 2010, wine duty has increased by 28%, adding 48p in duty to a bottle of still wine, and wine duty has been frozen just twice in the last 15 years.


There is some cause for optimism, however - Philip Hammond froze duty on alcoholic drinks last year, and the WSTA has, along with 16 key players in the UK’s wine trade, written to the Chancellor both to thank him and to underline the need for more consistent support to redress decades of unfair treatment by his predecessors.


Wine duty rises wouldn’t just be bad for business – wine is now the UK’s most popular drink, with 64% of UK adults saying they drink wine (the equivalent of 33m people) and rises will hit consumers in their pockets too.


55% of the money Brits pay for an average priced bottle of wine is tax, including the equivalent of £2.16 in wine duty. It is even more for a bottle of sparkling wine at £2.77.


The Chancellor’s planned rises would add 7p on a bottle of still wine and 9p on a bottle of sparkling, with previous WSTA figures already released having shown that, since the Referendum result was announced and Britain began navigating a course away from the EU, an average priced bottle of wine has reached £5.68 - a 28p rise and an all-time high.


As prices rise, the WSTA’s latest Market Report revealed that volume sales of wine in the UK have been affected, and that, as an import product, wine is highly sensitive to market conditions.


By freezing duty next week the Chancellor has the opportunity to put the brakes on further price rises.


After a freeze in wine and spirit duty in the November Budget last year, between February to August 2018, wine duty income increased by £39 million, up 2% on the same time last year, and a report commissioned by the WSTA through EY notes that a freeze “represents a favourable outcome for the UK economy”.


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


“The wine industry is, unfortunately, no stranger to harsh treatment from Chancellors. Since 2012 wine overtook beer as the largest contributor to the public purse through duty payments, and no alcoholic drink has paid more to the Treasury since then.


“This cannot continue indefinitely, and we are now telling the Chancellor that enough is enough. He needs to lend the world leading UK wine industry his support.


“We welcomed a freeze from Philip Hammond last year, but there is so much more that needs to be done to unpick decades of unfair treatment and above-inflation rises, often inflicted whilst other, less popular alcoholic drinks enjoy more favourable treatment. Any rise in duty would be particularly harmful for importers and small businesses, who are uniquely and acutely exposed to the risks of leaving the European Union.


“We have heard talk over the last 18 months of ‘taking back control’ – In this case, the government should exercise the control it already has, and show some support for our wine industry and freeze duty rates.”

 

Budget blow will mean price hikes for wine

The Wine and Spirit Trade Association is warning consumers to brace themselves for wine price rises as businesses take a huge inflationary hit following the Budget announcement.

Following Brexit’s impact on the pound combined with inflation the wine trade is already facing a tough trading landscape.

As a result of the 3.1% inflationary rises on alcohol imposed by the Philip Hammond, wine businesses and consumers will bear the brunt of the tax hike a month before Brexit.

The duty rises by inflation will mean a bottle of wine will go up by 7p, sparkling wine 9p and an average priced bottle of fortified wine will also go up 9p. This does not include VAT which would add a further 20% to the wine duty rise.

Based on volumes of wine sales over the last 12 months, from February next year UK consumers of wine and sparkling wine will be hit with an extra £90 million bill.

An average priced bottle of spirits will remain the same following a welcome freeze to spirit duty.

Hammond has made himself an unpopular Chancellor with the wine trade and wine drinkers after singling them out for a rise and freezing duty to all other alcohol products. The Chancellor also put up wine duty in the Spring Budget last year.

Commenting on the Chancellor’s decision to freeze duty on spirits and raise wine duty by inflation, Miles Beale Chief Executive of the Wine & Spirit Trade Association said:

“We welcome the Government’s decision to freeze duty on spirits, which will support this great British sector to invest, grow and create jobs - as well as supporting the public finances through increased revenues.

However, the decision by the Chancellor to increase wine rates significantly is a hammer blow to this great British industry. It actively undermines a sector that has been hardest hit since the Brexit Referendum and will be thoroughly unwelcome for the 33 million consumers of the nation’s most popular alcoholic drink.

This inflationary rise is grossly unfair, unjustified and counter-productive. The UK is the world’s biggest wine trading nation and, as such, deserves government’s support, not punishment.

The wine industry is, unfortunately, no stranger to harsh treatment from Chancellors. Since 2012 wine overtook beer as the largest contributor to the public purse through duty payments, and no alcoholic drink has paid more to the Treasury since then. Today’s announcement means that only twice since 2003 that Chancellors from either party have showed their support to an industry employing some 190,000 people across the country.

By increasing the UK’s already excessive duty rates the Chancellor will clobber wine importing businesses, including thousands of SMEs; stifle growth of our flourishing English wine industry and; raise prices for consumers.”

The failure to rebalance this unfair tax burden on the wine industry will stifle business’s ability to invest and grow and damage the sector which last year brought in almost £19 billion in economic activity.

The increase goes against recent Budget success stories. After a freeze in wine duty in the November Budget last year, between February to August 2018, wine duty income increased by £39 million up 2% on the same time last year.

Miles Beale added:

“The freeze in duty on spirits announced today will be hugely welcomed by the hundreds of producers across the UK, and over 280,000 people employed across the spirits sector. Gin exports are now worth over £532 million, and the freeze announced today will give UK spirit producers the confidence to continue to expand their export markets and seek to take advantage of future trading opportunities.

However, this Budget represents a missed opportunity. It ignores the evidence from the last Budget that Treasury coffers actually increase following a freeze in wine duty. The inflationary rise in wine duty suggests the Chancellor has closed himself off to the concerns of our world leading industry and is wildly out of touch with British consumers.

Moreover, today’s announcement puts us further out of step with excise duty rates internationally. It won’t please those wine-producing nations who want to agree FTAs with the UK either. It forces British businesses to compete on an ever more uneven playing field, which is grossly unhelpful particularly when final preparations are being made to leave the EU – potentially without a deal.”

The revised rates are due to come into effect after midnight on Friday, February 1st.

Following the Chancellor’s announcement that duty on wine, sparkling wine and fortified wine will rise by RPI from 1 February 2019, the Treasury has now confirmed that RPI is forecast to be 3.1% next year. Duty on spirits, beer and most ciders will be frozen at current rates.

This will mean:

Duty on a 750 ml bottle of wine will go up 7p to £2.23

Duty on 750 ml bottle of sparkling wine will go up 9p to £2.86

Duty on a 750ml bottle of fortified wine will go up 9p to £2.98

These numbers do not include VAT which will add a further 20% to these increases.

Duty on a 700ml bottle of vodka at 37.5 % will remain at £7.54

Duty on a litre bottle of vodka at 37.5 % will remain at £10.78

Duty on a 700 ml bottle of gin at 40% % will remain at £8.05

Duty on a litre bottle of vodka at 40% will remain at £11.50

Gin is just the tonic for British business

Gin makers across the country have joined forces to call on the Chancellor to freeze spirit duty and show he is backing British business.


The Wine and Spirit Trade Association teamed up with 24 of the UK’s top distillers to write to Philip Hammond, raising serious concerns over a planned increase to spirits duty at the Budget this month.


The message to Hammond is to honour the comments made by Theresa May at Conference when she said the Conservatives were “a party that believes in business”.


British Gin makers could take a hit of over £16 million extra in duties on last year if Philip Hammond puts the boot into booze at the Budget and raises duty again.


The planned 3.4% duty rise would add another 26p on a bottle of spirits. 75% of an average priced bottle of spirits goes straight to the taxman, with £8.05 for every 70cl bottle of gin at 40% abv going on duty.


Entrepreneurial spirit makers are warning that the tax burden will stifle the growth of innovative, creative start-ups who have helped drive the gin renaissance and allowed British gin to break records both home and abroad.


The latest WSTA market report showed gin broke the £2 billion mark with sales doubling in value in the last five years.


Brits bought almost 60 million bottles of gin in 12 months, worth over £1.6 billion which when you add it to over £530 million worth of British gin exports breaks £2 billion for the first time.


The latest HMRC figures showing 315 distilleries are currently operational, with 49 openings in the last year, and more than double the number that were operating 5 years ago.


Thanks to a surge in popularity of British gin, which has been dubbed the ‘ginaissance’, gin is out performing all other spirit in terms of growth of sales in the UK. The juniper-based spirit now accounts for a whopping 68% of value growth in the spirits sector.


Gin sales brought in around £620 million to pubs last year, £190 million more than the previous year. The gin menu is now a common feature in British pubs with most bars choosing to stock a range of different gin brands.


But despite gin proving it is just the tonic for UK business, the nation’s favourite spirit is set to take a hit if the Chancellor goes ahead with planned rises to alcohol duty.


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

“Government has vowed to back British business. Well you can’t get much more British than gin! After breaking the £2 billion-mark British gin has proved itself to be just the tonic for the Government’s ambitions to grow exports of premium British products. The gin boom in the UK has allowed our talented and innovative British distillers to invest and grow their businesses creating new jobs and boosting the British economy.


"However, if the Chancellor does not freeze alcohol duty he will be stifling the spirits industry. British gin is a global phenomenon which is why we are asking the Chancellor why he is penalising what Britain does best? By freezing spirit duty, he would be allowing industry to invest, create jobs and grow while at the same time boost Treasury coffers.”


In November the Chancellor put a freeze on alcohol duty and received an extra £380 million in between February and August, up 6% on the same period the year before. Over £160 million of that windfall came from spirit duties up 9% on the previous year.


The UK gin industry paid over £750 million in duty and VAT in the last 12 months.


If the planned duty rise goes through, gin duties could cost UK distilleries the equivalent over £50,000 each next year. For start-ups and SME’s in particular this is a burden that would hold back business ambitions.


The UK alcohol industry is one of the most heavily taxed in Europe, as we are stung by the third highest duty rates for wine and fourth highest duty rate for spirits across the EU.
Dan Szor, founder of Cotswold Distillery, said:


“My main concern about the proposed increase is that it will stifle the growth of a sector that is flourishing. I worked in finance for many years; it’s easy to recognise a strong trend. It’s the small scale, independent producers that are growing fastest in number and fuelling the monumental growth in this category. Tax revenues from spirits overtook those from beer for the first time last year and we’re the fastest growing gin market in the world – we would strongly urge the Government not to take steps that will strangle small producers, as a serious downturn would be the inevitable consequence.”


Mark Gamble founder of Union Distillers makers of Two Birds Countryside Spirit said:


“An increase in duty has an impact on both business and consumers who inevitably will see prices rise. The knock-on penalty for the whole of the Spirits industry will be a slowdown in growth and reduction in sales at a time when we are all looking to future proof our businesses from the Brexit fallout.”


Kathy Caton, founder of Brighton Gin, said:


“We are so excited that British gin is such a success story, and one where the interest in the category is absolutely being led by premium craft gins such as Brighton Gin. Discerning consumers have rightly identified British craft gin as the world's best but any interest in duty will jeopardise our export plans at just the moment that we are scaling up and gearing for growth".
The gin distillers’ plea for a freeze comes two weeks after frustrated English wine producers signed a joint letter to Hammond calling for him to scrap planned wine duty hikes and support the home-grown wine industry.


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