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Wine and spirit industry sets out why government must make free trade with Australia and New Zealand a priority

The Wine and Spirit Trade Association has called on government trade negotiators to remove all existing tariffs to allow the UK to enhance trade with Australia and New Zealand when the UK leaves the EU.

In a submission to the Trade Select Committee last week the WSTA called for new bilateral agreements to be a priority after Brexit.

Currently the tariffs on wines imported from Australia and New Zealand into the UK work out at around 10-12p added to a bottle of still wine and 22p on sparkling wine.

In return British spirits being exported to our Antipodean cousins pay an extra 5% of the value of their products to get them into the country.

These barriers push up the price for consumers who already pay a huge whack when the UK’s excessively high duty levies are added on. Britain has some of the highest duty rates in the world pushing the price of a bottle of still wine up a further £2.16 and £2.77 on a bottle of sparkling.

The tariffs also stifle the vibrant UK wine and spirit businesses who rely on huge volumes of wine imports coming to the UK and vast exports of British spirits going the other way.
Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said:

“In her speech in Davos this week the Prime Minister said the UK intends to be at the forefront of championing new trade deals. We welcome this and call on government to take the opportunity post Brexit to enhance trade with Australia and New Zealand by removing all unnecessary regulatory barriers and allowing goods to flow more freely between the markets. Australian wine is the most popular wine drunk in Britain and growth of New Zealand wine sales are outpacing any other country. Australia and New Zealand import more spirits from Britain than any other country.

“A tariff free trade deal is therefore a win-win for industry and consumers on both sides of the world and it is something we have been talking to our trading partners and politicians down under about since the vote to leave the EU. There is strong support on both sides for this sort of bilateral trade agreement which should become a blueprint for our future trade agreements with other countries outside the EU.”

Theresa May addressed the World Economic Forum in Davos, Switzerland, on Thursday where she told delegates that the “UK will continue to be a global advocate of free trade”.
In 2016, Australian wine exports to the UK were worth £1.5bn in sales, whilst UK spirits exports to Australia were worth £613m in sales.

In the same period sales of New Zealand wine in the UK were worth £618m and sales of UK spirits exports in New Zealand were worth some £50m. Helping New Zealand to become the fifth largest wine exporter to the UK by value.

The WSTA estimate that customs tariffs on wines entering the UK from Australia and New Zealand amounted to some £35m in 2016.

Over 80% of Australian wine, and over 40% of New Zealand wine, exported to the UK is shipped in bulk where it is bottled and some of it re-exported to the EU and Norway.

The removal of tariffs would allow Britain to maintain its position as the international hub in the world wine trade further boosting the UK economy and providing more jobs.

The Australian and New Zealand wine and spirit sector contributes to around 37,000 jobs directly and a further 22,000 jobs indirectly.

The UK is the world’s largest spirits exporter, with approximately 45% of exports going to the EU. On leaving the EU, UK spirits will need to increase exports to developed markets and Australia and New Zealand are a target market.

The number of distilleries in Britain has more than doubled in the past five years and there are now 315 distilleries, up from 152 in 2013, according to figures from HM Revenue & Customs. To sustain new and innovative brands, developed markets such as Australia and New Zealand will be key to their survival. The removal of spirits tariffs applied to UK exports will be a huge boost for British spirit makers.

The WSTA is calling on government to take advantage of the groundwork that has been done for them by the WSTA and to secure a free trade deal with Australia and New Zealand.


Gin boom sparks surge in distillery openings in 2017

Britain now boasts 315 distilleries in the UK – more than double the number that were operating across the country five years ago.


New HMRC figures reveal that a total of 49 new distilleries started up in 2017 – seven closed – which adds a further 42 distilleries to the total number operating in the UK.


22 of these were in England and a further 20 opened in Scotland, four more opened in Wales and another three set up in Northern Ireland.


Just five years ago, in 2013, there were only 152 distilleries operating in the UK, the majority of which were located in Scotland.


Since then Britain has been in the grip of a ‘ginaissance’ with a record number of bottles of gin sold last year and an estimated 95 different gin brands on the UK market.


Distilleries in the UK are now diversifying and taking advantage of Brits love of cocktails with an increasing number of new whiskies, vodkas, rums, brandies and liqueurs appearing every year.


Experts are predicting that the growth in UK distilleries will continue this year after the industry received a boost from the Chancellor when he froze spirits duty in his November budget. 

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


“Gin is the key driver behind the surge in new distillery openings in the UK in the last five years. New gin brands continue to pop up on our supermarket shelves, on a regular basis, as Brits show no sign of tiring of the quintessentially British spirit. It wasn’t that many years ago when a pub would stock one gin brand and now a gin menu offering a range of gins and mixers is common place in our pubs and bars. It is welcome news that another 49 new distilleries opened in the UK last year brining new jobs to the British spirit industry and helping boost Britain’s export potential. There is a significant amount of investment going in to the British spirits industry and the Chancellors welcome boost is likely to see this trend continue into 2018 – as well as broadening out into new variations of English and Welsh whisky.”


UK distillery openings have gone up 172% from 116 since 2010 when the WSTA first started collecting the data – adding 199 in just 7 years.


The region showing the most rapid growth is England which in 2010 had only 23 distilleries and which grew to 135 in 2017, accounting for 56% of all UK openings in the last eight years. London alone now has 24 making it the UK’s gin capital.


While gin has been the main driver over the past 5 years, English and welsh whisky is also contributing to the boom.


James Wright, Managing Director of Aber Falls Distillery which will begin operating this year, said:


“It is an exciting time for the UK spirits industry as people are showing more and more interest in trying new spirit drinks and learning about where these drinks come from and how they are made. Our new site in Abergwyngregyn includes a visitor centre and training centre where the public will be able to sign up for our courses in craft distilling. We are extremely pleased to be creating a new distillery in Wales which will bring jobs and trade to the local area.”


2017 saw yet another bumper sales quarter for the quintessentially British spirit, according to the Wine and Spirit Trade Association’s latest market report.
Brits have bought over 47 million bottles of gin, a record breaking equivalent of 1.32 billion G&T’s, in the last recorded 12 months. This is up 7 million bottles compared to the same period a year ago. 

At the same time, a YouGov poll found gin is the most popular spirit with 29% of drinkers voting it their favourite spirit tipple.


The gin industry across the on and off trade in the UK in 2011 was worth £630m. since then it has nearly doubled to £1.2bn in the 12 months to September 2017, with gin in the on trade alone worth nearly £730m in yearly sales.


The WSTA market report, released last month, shows the equivalent of over 8.8 million bottles of gin were sold in our pubs, bars and restaurants worth £729 million in the same 12 months.


But the majority of the gin sold in the UK is from our shops and supermarkets where 38.7 million bottles flew off the shelves between September 2016 – 2017.


British Gin sales abroad have also seen a meteoric rise in UK food and drink exports with sales now worth more than beef and cereals.


The UK hit its largest ever gin exports in 2016 worth £474m making it the world’s 7th most valuable food and drink export, and growth won’t stop there – the IWSR Forecast Report projects that gin is expected to grow by a further, astonishing 37.2% by 2021.


In the 2017 International Wine & Spirits Competition (IWSC) UK gins received 124 medals. Five of which were Gold Outstanding awards and 12 Gold.


To find out more about the rise in UK distilleries go to the WSTA blog written by Head of Research and Insights, Ciaran Myles.

 

Ho Ho Ho, and a bottle of rum!


Rum is proving to be a big hit with Brits who have showed their love of the pirates’ tipple according to the latest sales figure.


After Christmas sales are taken into account, rum is expected to exceed the £1billion sales mark by the end of 2017, following in the footsteps of gin which broke a billion pounds in 2016.
The latest market report released by the Wine and Spirit Trade Association shows that total sales in the UK up to September this year reached £991million, up 5% on the same period last year.


This is the equivalent of 34.3 million bottles sold in our shops and supermarkets, pubs, bars and restaurants. If current trends continue rum sales in the UK will be worth over £1billion by the time the clock strikes midnight on New Year’s Eve.


In the last 5 years UK rum has seen sales increase 18% by volume and 38% by value.


The latest increase in sales attests to the growing appetite in the UK for rum and the increasing number of brands on the market. In 2006, there were around 50 rum brands on the UK market, which has now increased to over 150 in 2016, showing that curiosity in new and different brands is not confined only to gin.


Sales of rum over the summer were given a boost as Brits enjoyed trying new concoctions whipped up as part of a craft cocktail craze. In the 12 weeks to 9/9/17 £76 million worth of rum was sold in our shops and supermarkets a rise of 6% compared to the same time last year.


Sales in the UK’s pubs, bars and restaurants saw a healthy 9% increase compared to the same 12 weeks in 2016. Flavoured and spiced rum has shown strong growth in UK shops and supermarkets up 14% in both volume and value sales - selling over 9.2 million bottles, worth £123 million in the 12 months to September this year.


In the UK’s pubs bars and restaurants Golden has enjoyed double digit growth over the summers months (12 weeks to 9/917) worth £76 million up 14% on last year.


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


“Rum has packed a punch in terms of sales this year benefiting from the nation’s thirst for craft cocktails. We are pleased to see a rapid growth in the number of distilleries in the UK which has enabled our innovative spirit makers to expand their ranges with many introducing a rum into their portfolio. In turn, this has led to more and more rum bars emerging and established bars stocking a greater range of rums behind the bar.”

Peter Thornton, Rum & Cocktail Category Development Manager at Cellar Trends, adds:

“2017 has been a very good year for rum in the UK with consumer interest continuing to grow, and an extremely busy one for Cellar Trends with our varied portfolio. All the signs seem to suggest rum will continue to prosper in 2018 as the number of rums brands, and styles increases further – I’ll raise a glass to that this New Year!”

 

WSTA shortlisted for two European awards

The Wine and Spirit Trade Association’s 2018 got off to a positive start after it was announced the organisation has been shortlisted for two prestigious European Association Awards.

The WSTA are one of six finalists in the ‘Best Conference under 225 attendees’ category, and have also made the final round of the ‘Best National Association’ category, too.

In their first submission, the WSTA centred on their Annual Conference, which featured a formidable line-up of speakers including Lord Price, former Trade Minister, and Tim Martin, Wetherspoon Chairman. 

Also on the panel were Miriam González Durántez, Partner, Dechert LLP, and co-chair of the firm’s International Trade and Government Regulation practice and Sir Simon Fraser, Managing Partner, Flint Global, and who for five years, until 2015, was the Head of the UK Foreign Office and Diplomatic Service.

The Conference set out how the Government can deliver for the wine and spirit industry during Britain’s exit from the European Union, and also invited attendees to think creatively about the opportunities that Brexit may present, and was both handsomely attended and well received by members.  

The second submission set out how the WSTA delivered for its members during a turbulent 2017. 

Navigating through the uncertainty created by the developing Brexit negotiations, a surprise general election and subsequent hung Parliament, the WSTA worked throughout 2017 to secure a freeze in alcohol duty in the November Budget.

Alongside this, the WSTA hosted several events overseas to foster export opportunities for members, and maintained a consistent and clear presence in the media right throughout the year.

The European Association Awards ceremony will take place on 23rd February, and is organised by Global Conference Network. 

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

“We are delighted to be shortlisted for these two awards, and it’s great that the WSTA’s work throughout has been recognised.

“Whilst 2018 is only a few days old, we’re already building on the success of last year and continuing to do all we can for wine and spirits. Nevertheless, it would be fantastic to pick up an award in February – or even do the double!” 

 

The Wine and Spirit Trade Association’s 2018 got off to a positive start after it was announced the organisation has been shortlisted for two prestigious European Association Awards.

The WSTA are one of six finalists in the ‘Best Conference under 225 attendees’ category, and have also made the final round of the ‘Best National Association’ category, too.

In their first submission, the WSTA centred on their Annual Conference, which featured a formidable line-up of speakers including Lord Price, former Trade Minister, and Tim Martin, Wetherspoon Chairman.

Also on the panel were Miriam González Durántez, Partner, Dechert LLP, and co-chair of the firm’s International Trade and Government Regulation practice and Sir Simon Fraser, Managing Partner, Flint Global, and who for five years, until 2015, was the Head of the UK Foreign Office and Diplomatic Service.

The Conference set out how the Government can deliver for the wine and spirit industry during Britain’s exit from the European Union, and also invited attendees to think creatively about the opportunities that Brexit may present, and was both handsomely attended and well received by members.

The second submission set out how the WSTA delivered for its members during a turbulent 2017.

Navigating through the uncertainty created by the developing Brexit negotiations, a surprise general election and subsequent hung Parliament, the WSTA worked throughout 2017 to secure a freeze in alcohol duty in the November Budget.

Alongside this, the WSTA hosted several events overseas to foster export opportunities for members, and maintained a consistent and clear presence in the media right throughout the year.

The European Association Awards ceremony will take place on 23rd February, and is organised by Global Conference Network.

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

“We are delighted to be shortlisted for these two awards, and it’s great that the WSTA’s work throughout has been recognised.

“Whilst 2018 is only a few days old, we’re already building on the success of last year and continuing to do all we can for wine and spirits. Nevertheless, it would be fantastic to pick up an award in February – or even do the double!” 

Prosecco boom helps Italian wine become the best seller in UK pubs

Wine from Italy is the biggest seller by country in the UK’s pubs, bars and restaurants. The latest WSTA market report shows over 64.6 million bottles of Italian wine, including still and sparkling, were sold in the on trade in the 12 months to September.

In total sales of Italian wine have gone up 7% in volume sales and up 13% in value, worth £1.1 billion, compared to the previous year. Much of the rise is attributed to the Prosecco boom in the UK, giving British pubs a much needed boost.

Sparkling wine is worth nearly £500m a year to the on trade, with another £400m from Champagne sales in the last year. 48% of volume sales is estimated to be from Prosecco alone, nearly 10m bottles.

Despite the success of sparkling and Italian wine in the pubs bars and restaurants, fears remain over the ability of UK pubs to thrive as rising inflation, currency devaluation and uncertainties surrounding Brexit mean that it is more expensive to import wine from the EU.

Overall wine volumes in pubs, bars and restaurants, have declined by 10% since 2013 but wine from the EU accounts for 62% of all wine sold in the UK on trade. This is up 9% since 2013, showing that consumers are increasingly looking to EU wines to enjoy with their meals and whilst out with friends for a drink. Nearly £7 out of every £10 spent in the on trade are on EU wines.

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

“The growth in popularity of wine from Italy has hugely benefited the British pub, bar and restaurant trade. The prosecco boom has made sparkling wine more affordable on a night out and encouraged people to try something new. We are increasingly seeing pubs expanding their wine lists, which is fantastic for the wine industry and consumer choice.

But our great British pub industry still facing growing pressures from high duty collections and decreased consumer spending but also from uncertainties surrounding Brexit. Wines from the EU account for 3 out of every 5 bottles sold in UK pubs, bars and restaurants and it is vital for UK pubs that trade flows remain open, easy and frictionless.

We are delighted to have moved on to the next phase of negotiations and hope that the government can deliver for the UK pub goer.”
British pubs are closing at an average 21 per week as landlords across the country battle against rising costs, high duty rates and the uncertainties of Brexit.

The UK is one of the key global hubs for the wine trade and last year the UK traded just shy of £2.3 billion in wine. It is the world’s second largest importer of wine by both volume and value.

The wine industry is currently supporting 554,000 British jobs across the supply chain and is worth £50 billion in economic activity.

 

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