Wine prices would increase by an average of 30p a bottle if the full impact of the pound’s collapse since the Brexit referendum was passed on, according to the Wine & Spirit Trade Association.
Chief executive Miles Beale says the currency situation has “fundamentally affected” wine retailers and calculates it would take a 10% cut in excise duty in the March 8 Budget to balance out the effects of the pound’s slide since the summer.
The WSTA is calling on the Chancellor to reduce wine and spirit duty by 2% which he claims is the “very least” the government could do to alleviate pressure on the drinks industry. Beale is urging wine merchants to write to their MPs to argue the case for lower duty, which he says could also deliver higher returns for the Exchequer, based on the experience of 2015 when spirits duty was cut and wine duty frozen.
The WSTA is in talks with counterparts in Europe and around the world to draft trade agreements to give politicians ready-made solutions to the challenges they will face after Brexit.
“The UK government can’t start these negotiations immediately, but we absolutely can,” Beale says. He predicts relations with non-EU wine producers could improve after Brexit.
The full interview with Miles Beale appears in the February edition of The Wine Merchant.
The number of consumers taking wine courses is continuing to soar, according to figures from the WSET.
Students from outside the wine trade account for around 30% of the 17,000 WSET exams taken in the UK each year. Their numbers increased by 55% last year and figures for the first three months of the current academic year – September to November – show that the momentum is being maintained.
The stats make encouraging reading for the independent trade, which arguably benefits the most from an educated customer base. Some merchants – including Loki in Birmingham, Hennings in Sussex and JN Wine in Northern Ireland – are WSET educators.
Graham Cox of the WSET says: “We’re appearing at more consumer events and our social media is much more engaging.
“I would also say that our network of providers is better spread and better geared up to deliver. I think if you went back five years, a consumer trying to find a course wouldn’t have been exposed to the marketing, and may have struggled to find something in their area.”
The Local Wine School network, another WSET provider, now operates from 40 locations around the UK. Student numbers grew by about 40% to just under 2,000 in 2015-16, with the trade-consumer split estimated at 50-50.
This story appears in the January 2017 issue of The Wine Merchant.
Every year The Wine Merchant carries out the most comprehensive survey of the UK independent wine trade.
It’s that time again and we’d love all our independent wine retailer readers to spend 10 minutes of their time to take part.
Obviously we don’t share individual responses but collectively the data we compile helps us build up a very detailed picture of the state of play in the independent trade.
Our friends at Hatch Mansfield are partnering us this year and have generously donated five cases of wine which will be sent to five respondents chosen at random.
Please click here to take part.
Where did 2016 go? We were just beginning to enjoy it – well, bits of it, anyway – and then it was all over. For The Wine Merchant, at least. This is our final edition of the year (there really is no point publishing on December 15) and so we hope it keeps you going until January.
This year we’ve set a new personal best for the number of trips, lunches and masterclasses we’ve organised for independent wine merchants and there have been memorable excursions to France, Spain, Portugal, Turkey and Germany.
We like to share these things around as fairly as possible so do keep an eye on our Twitter feed for details of what we’re getting up to in 2017. Many of our projects will also be mentioned in the email alerts that we occasionally send out.
We’re also on the hunt for judges in next year’s Wine Merchant Top 100. Again, we like to mix things up every year so as many independents as possible have chance to take part. Sometimes merchants worry that they “haven’t done any wine judging before” … but of course they have, as part of the buying decisions they make for their businesses. The judging process for our competition is remarkably similar to that.
Independents have been hit with pre-Christmas price increases following the collapse of sterling against key currencies like the euro and the US dollar. But the worst is yet to come, reports Graham Holter
The message is invariably apologetic. Yes, we know what the prices are in the list we sent you. But sadly due to currency issues beyond our control, we have had no option but to increase them. Thank you for your understanding and support.
The increases, typically between 3% and 5%, are sometimes across the board, but have in some cases been calculated on a line-by-line basis. Sterling’s turmoil on the currency markets since the Brexit vote means few merchants are surprised by an uncustomary pre-Christmas hike. But given the scale of the pound’s capitulation in recent months – and bleak warnings about the currency’s prospects in 2017 – the bigger concern is how much prices could leap again in January and February.
As The Wine Merchant went to press, sterling was trading at £1.16 against the euro, compared to £1.27 six months earlier (and almost £1.32 in late May). Over the same period against the US dollar, its value fell from £1.43 to £1.30, taking in a pre-referendum spike of £1.48.
Against the Australian dollar the pound fell from around £1.87 to £1.70, though shrewd speculators would have caught a rate of £2.04 in the late spring. It’s a similar picture with the South African rand: today’s rate of £17.50 compares to around £22 back in April, and over £23 in May.