The April edition of The Wine Merchant contains part two of our reader survey. How important are on-premise sales to independents? Or dispense machines? Or food? The answers may surprise you.
By and large we’re detecting a slightly more conservative streak among indies this year, perhaps not surprising given the price increases that are providing a jolt to the system, and the uncertainty surrounding Brexit’s effect on the economy.
But there’s a definite surge in interest in direct imports. Almost half of respondents plan to increase the amount of wine they source directly from producers in the coming year, with around a quarter expecting to buy at current levels.
Just under 21% say they will continue to buy all their wines from UK suppliers.
Direct importing is often not as complicated as novices fear it might be. But it does leave merchants exposed to currency shocks, and it creates admin that many find fiddly and time-consuming. Logistics and storage can be a headache. Many who go down the direct-import route say they only really appreciate the value of the service provided by agency businesses when they try to do the job themselves.
Most merchants have no intention of importing 100% of their wines. But the proportion of what they do buy in this way looks certain to rise.
Germany is the source of some of the trade’s favourite wines. Every year Wines of Germany assembles a panel of experts to sift through hundreds of bottles – some of which are already available in the UK, others which are seeking distribution – to select their favourites.
This year’s top 50 will be featured in the April edition of The Wine Merchant – but here’s a sneak preview of the winners.
If you’d like to taste the wines for yourself, they’ll be available at the annual German tasting in London on May 9, which this year goes by the name of G String. Click here to register.
Independent wine merchants are an upbeat, positive and energetic bunch. But they’re not delusional. The pound’s capitulation against the euro and dollar(s), coupled with the chaos of Brexit, presents some big challenges for indies.
Our reader survey, reported in this week’s edition, reflects this. Just under 70% of respondents remain positive about increasing their trade in the coming 12 months, but this contrasts with 81% last year and 89% in 2015.
The results were compiled before last week’s 8p-a-bottle hike in wine duty, which hasn’t exactly lightened the mood. Throw soaring business rates into the equation and you have a recipe for gloominess.
But independent wine merchants are resourceful types, and experts at spotting opportunities. And if there’s an economic downturn, they’re often the beneficiaries, picking up extra business as consumers forego nights out in favour of home entertaining – in the company of better quality wine than they might previously have bought. It’s a phenomenon that Laurence Hanison, recently retired from Mill Hill Wines in north London, has experienced first-hand during three recessions.
Independent numbers grew, in net terms, by around 40 last year, bringing the total of specialist wine shops to 822 as we write. More shops are opening than closing. And the new entrants often have imaginative, wide-ranging business plans that go way beyond simply putting wines on shelves and waiting for punters to walk through the door. Take look at the likes of Unwined in Tooting, Jaded Palates in Devon or Burgess & Hall in Forest Gate for some recent examples.
The coming year is going to be tough for many. But we’re willing to bet that the independent sector continues to grow – and thrive.
Coverage of this year’s reader survey appears in the March edition of The Wine Merchant and continues in our April issue.
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.