Forty-five independents in issue 42

The Wine Merchant issue 42We talk to independent merchants all the time. We visit their shops, we bump into them at tastings, we travel with them to wine regions, we invite them to lunch, we chatter on Twitter, and we speak on the phone (until we hear that tell-tale beep of their shop door opening).

So it’s perfectly normal to pick up a new issue of The Wine Merchant and read comments from these independents – some in the form of full-scale interviews, some in snappier soundbites. But we thought there was something different about the November issue. Maybe we’re getting nosier, or retailers are getting more talkative, but we seemed to have spoken to an awful lot of independents in the process of putting issue 42 together.

A quick count-up reveals that 45 independent merchants are quoted, in some shape or form, in the new issue. We’re quite pleased with that. The only way a magazine like ours can meet the needs of its readership is to actually talk to those readers, as often as time permits and in as many situations as possible.

So thanks to all the independents who made time for us over the past month or two, giving us insights into their businesses and venturing opinions and ideas that will interest and inspire other merchants. The Wine Merchant is your magazine and we couldn’t make it without you.

Issue 41: what’s happened to the AWRS?

The government’s new registration scheme for alcohol wholesalers was meant to be in full swing by this point. Instead, the launch been postponed till the New Year. So what exactly has gone wrong?

The official line from HMRC is that “technical issues need to be fixed before the service is launched”. Wholesalers were supposed to start applying to join the Alcohol Wholesaler Registration Scheme from October 1, with inspections beginning on January 1. The delay has caused irritation at the Federation of Wholesale Distributors, which had lobbied hard for the new regime on behalf of its members – operators such as Booker, Bestway, Palmer & Harvey and the Today’s Group.

Page 1Chief executive James Bielby complained: “This late change is very frustrating for us and our members. Members have volunteered to test the application process over the past six months, and we have put considerable effort into informing them and other stakeholders of their obligations and the original timeline.”

It may well be that IT niggles are the genuine reason for the delay – indeed HMRC has said that it is now inviting selected operators to test-drive the registration system to iron out whatever problems lurk in the machinery. But perhaps part of the issue is that many of the businesses that will be caught in the net of the new regime have no idea that they are expected to register.

The FWD wanted the AWRS for perfectly understandable reasons. For decades, its members have been undercut and undermined by dodgy warehouse operators with a somewhat relaxed view of VAT returns and excise duty obligations.

The success rate in dealing with such bad apples has been notoriously low: businesses have a tendency to disappear as quickly as they spring up, and the costs involved in pursuing prosecutions test HMRC’s finite and already stretched resources. Suspicious stock gets impounded in the occasional raid, but it’s not unknown for it to be handed back due to insufficient evidence being compiled, and even for wholesalers that wriggle out of punishment to pursue an opportunistic civil action against HMRC.

On the face of it, the AWRS is a masterstroke as it turns the tables on rogue operators: it’s up to them to convince HMRC they are fit and proper people to wholesale drinks. If they fail to do so, their names don’t go on the central register and it’s illegal for retailers to buy from them.

The system was essentially drawn up to deal with the sale of duty-dodging lager and unfeasibly cheap branded wine. Specialist wine merchants are the nuts that this particular sledgehammer is hitting in the process, which is accepted by some independents but resented by others.

Although relatively few specialists are currently losing out directly to the duty cheats, as they compete in a different area of the market, it’s a comfort to some independents that efforts are being made to clean up the wholesale sector as a whole and to ensure that those who do play by the rules are not disadvantaged.

But if the new regime is to work correctly, the entire industry needs to be better informed about the AWRS, how it affects individual businesses and the penalties for not complying. A straw poll of independents by The Wine Merchant in advance of the original October 1 opening date for registration found that about a third of businesses knew nothing about the new system.

The majority of independents have some wholesale interests, and on average derive 20% of their turnover from such trade, so there is clearly a publicity problem that officials need to address. And almost all merchants buy at least some of their stock from suppliers who will themselves need to register on the AWRS. Buying from a source without HMRC’s seal of approval will soon be a criminal offence.

Might that lack of awareness be part of the reason for the sudden decision to halt this autumn’s registration process? Has HMRC acknowledged that, during the busiest trading period of the year, even merchants who did know about the scheme might forget to enrol?

The FWD may be fuming at the delay, after campaigning so long for the AWRS to be adopted. But if the scheme is to function as intended, it needed to avoid the chaotic start that it almost achieved.

HMRC may yet get it right in 2016, but for that to happen it doesn’t merely need to tinker with the IT – it needs to think long and hard about how it communicates a system that a significant percentage of drinks suppliers still don’t recognise or understand. Punishing a few non-compliant merchants to get the message across would be an unfair alternative to proper advance publicity.

This article appears in the October edition of The Wine Merchant – click here to access the digital version of the magazine.

Issue 40: fresher than Thresher

It’s almost six years since First Quench collapsed. Its three-for-two discounts remain unmissed and unmourned; its universally reviled auto-replenishment system, which allowed a computer to over-ride the local knowledge of managers, still causes bemusement and indignation, even as a distant memory.

The inevitable demise of the business created turmoil and misery for all concerned. But just as trees soon start to grow in a storm-ravaged forest – and indeed thrive, due to the lack of competition for light, water and nutrients – so have independent merchants seen a benefit in the post-Thresher clearing.

Many of the hopefuls who took on former Thresher, Bottoms Up and Wine Rack stores ended up making the same core mistake as their former employers had done. There was a lack of imagination in the offer – a mish-mash of low-quality wines, usually overpriced for what they were, in a strip-lit, carpet-tiled environment where cheap lager and PETs of white cider were piled high.

But many took a completely different tack, either because they had worked long enough within First Quench to recognise there was a better way to run a specialist wine shop, or because as outsiders they could spot a promising butIssue 40 page 1 underperforming site when they saw one.

In the new issue of The Wine Merchant, we identify 12 independent wine specialists that have thrived in former First Quench branches. In some cases, these businesses have opened second (and third) branches. Much of the recent thrust behind the indie sector can be attributed to such investors … and their efforts have ensured that any retelling of the First Quench saga – a debacle in so many respects – has a positive dimension.

Is your name being taken in vain?

Worrying news from two independents whose identity is being “borrowed” by fraudsters who are looking for free credit from European wine producers and suppliers.

Posing asissue 39 page 1 respectable and genuine UK traders, the criminals are not just causing a headache for those whose names they are using. They’re cheating honest producers out of wine that they’ll never get paid for – and also risking the reputation of an independent trade that’s become increasingly interested in direct imports.

You can read the full story in our August edition. Please get in touch if your business has had problems similar to those experienced recently by the Halifax Wine Company or Good Wine Shop in south west London – and make sure you also contact Action Fraud.

Read about the Wine Merchant Top 100 winners

This monWM Top 100 page 1th’s Wine Merchant mailing includes a free supplement containing details of all winners in The Wine Merchant Top 100 competition.

Every wine is described and detailed by David Williams, based on the comments and feedback provided by our independent judges.

You can access the digital version here. Congratulations again to all winners – these are wines that do the independent sector proud.