For understandable reasons the majority of drinks companies, particularly those producing household wine brands, like to keep their political feelings to themselves and instead rely on their respective trade association bodies to do any direct lobbying for them. Until now. The seemingly endless strategy of any government to continue to increase duty on alcohol is forcing drinks companies to take action. When the wine industry was singled out for a tax increase in last year’s Budget it was seen as a bridge too far. It resulted in the launch of the Wine Drinkers UK campaign, a wine industry-backed campaign, that calls for wine to be treated the same as any other drinks category. Richard Siddle talks to two of its biggest members, Michelle Brampton of Treasury Wine Estates and Simon Doyle of Concha y Toro about what they hope it can achieve.
The new Wine Drinkers UK campaign has seen major wine companies come together to take the case to government for a fairer tax strategy for wine.
If you work outside the drinks industry and tune into the annual Budget then you are not too surprised to hear pints of beer and bottles of wine and spirits being hit with another round of duty increases to go along with those thrown on packs of cigarettes or litres of petrol. That’s just the way world goes round and the government balances its books.
Instead if you listen more carefully and take a closer look at the government is actually doing and a very different picture emerges. It seems we have some areas of the alcohol industry that the government seems to like – beers, cider and spirits – which last year it rewarded with the second freeze in duty in two years, whilst keeping its 3.4% inflationary rise for wine. And wine alone.
It meant the Chancellor could claim a victory for the jobs and livelihoods of British pubs and major British industries, such as brewing and distilling, whilst at the same time ignoring a wine industry the Wine & Spirit Trade Association claims is responsible for generating £49bn in economic activity and employs close to 360,000 people.
The move was described at the time by the WSTA’s chief executive Miles Beale as being “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.”
Yet the rest of the wine industry said nothing. At least not publicly. That’s not the way things are done.
Or is it? It seems the then Chancellor’s Philip Hammond’s decision to throw duty sweeteners at beer, spirits and cider, was a step too far for the wine industry. It was so far over the line, in fact, that many of the country’s biggest wine brand players have united with big and small wine distributors, importers and retailers to do something about it. Step out from behind the veil of the WSTA and take direct action themselves.
Which has culminated in the launch of the industry-backed Wine Drinkers UK initiative. A new campaign that looks to take the argument about how unfairly wine drinkers are being taxed, compared to beer and spirits, direct to the “people” – as well as the national media and politicians.
Launched in August this is not just a Budget-focused campaign, but a long term concerted effort to change the dial when it comes to people’s perceptions about tax, duty and wine. Most of all it wants to make the case that wine is not just a side show of the drinks industry, it is the nation’s most popular and loved drink, regularly bought and consumed by 81% of regular drinkers.
Whilst the WSTA is very much a supporter of the new Wine Drinkers UK campaign, it is being funded, promoted and pushed by wine industry companies, both large and small. It’s the first time household wine branded companies have been willing to enter the political debate in this way – with Concha y Toro UK and Treasury Wine Estates, in particular, leading the charge.
Enough was enough. It was time to do something, says Simon Doyle, managing director of CYT in the UK, responsible for top selling wine brands such as Casillero del Diablo and Cono Sur and Trivento: “We could not continue to hide behind what the WSTA was doing. We had to take the lead on this issue.”
Unusual coming together
An initial meeting was held between five of some of the UK’s biggest wine companies last November to see what could be done. An unusual coming together in itself, but one forced by the matters in hand, stressed Doyle. “We all had a common cause and came together to see how we might address it,” he said.
Duty levels were now so high they could not afford to collectively “sit back”. It was time to get on the “front foot,” he said.
It was “time to change the narrative about wine” amongst politicians and the media. In particular, she stressed, it was key this new campaign could “get the message across that wine was the nation’s most popular drink” and the government’s actions are penalising those who enjoy drinking it.
Whilst the industry’s efforts in the past, driven by the WSTA, to focus on the economic impact that wine is having on the country has succeeded to some extent, it’s clearly not been enough to cut through with ministers and government departments.
People first approach
Brampton believes the industry needs to do more direct with the public through clearly targeted marking and PR. It’s why the face of the Wine Drinkers UK campaign is the PR agency, Headland. It is helping to steer the conversation and push key messages to the media.
Like last week’s announcement that wine is the drink of choice of most women. Which means singling it out for tax rises, means the government can be accused of a “gender bias” and going after a drink that women love more than men. “For women wine is there drink of choice,” said Brampton.
It’s hoped, she added, that everyone involved in buying and selling wine will get behind the campaign. Be it sharing its social media posts, and creating personal messages of their own.
“It’s incumbent on us to get the message out there” said Brampton, particularly around wine being the nation’s favourite drink. “People are not aware of the tax there is on an average bottle of wine. We need to make more people aware.”
A key feature of the campaign are the vox pop interview with regular members of the public showing their surprise to find out how much of an average bottle of wine is actually made up by duty.
Doyle, however, stressed they are not against there being a proportionate level of tax on wine, it’s just that its gone too far.
Cross industry support
What makes the Wine Drinkers UK initiative so potentially powerful is that this is not just being backed by major branded wine players, but is getting cross industry support. There are a number of wine companies involved in the campaign, big and small, some more willing to put their heads above the parapet than others. You can find the current list of supporters by clicking here.
Along with Treasury and CYT are fellow brand businesses, Australian Vintage, Casella, Simpsons Wine and Reh Kendermann. Distributors and merchants include Bibendum, Enotria & Coe, Jascots, Hatch Mansfield, Cambridge Wine Merchants, Oxford Wine Company, Indigo Wine, Graft Wine Company, Fell’s and Buckingham. Retailers include online specialists, Laithwaite’s and Virgin Wines.
That said The Buyer understands the sector’s biggest wine brand company, Accolade Wines, has chosen not to support the campaign financially although it was involved in initial talks and has its logo on the website. Acccolade has now responded to our approach for a comment with this statement: “Accolade Wines is pleased to show its support for the Wine Drinkers UK initiative and to sit alongside other wine businesses with its logo on the website. It is an important conversation to be had and we look forward to seeing how the campaign develops in these challenging times.”
The key for Doyle is that those who have invested come from a diverse range of backgrounds, which means it is well placed to ask different businesses to get involved in ways that are most effective to them. “This is a campaign with longevity. We are not just here for the short term,” he added. “The more companies, big or small, we can get on board the more sustainable it will be.” Brampton agreed: “We need this to be a strategic approach not a tactical one.”
She believes, for example, there is a role for the respective on and off-trades to play as they are talking to consumers every day. “There are lots of different ways they can contribute. It also affects everyone in the category.”
So whilst the focus will be very much on making the case for wine in the build up to the Budget over the coming weeks, it will be looking to address a number of other issues, like the gender bias story, in the months ahead.
Like the trade angle. For if and when the UK eventually leaves the EU and it is looking to make free trade deals of its own, the onus will be very much on presenting itself as a good market to be doing business in. Which might be a hard case to make when dealing with a country like Australia or New Zealand and talking about our high wine duty rates. “If you want a free trade deal with Australia you are making it a hard country to do business in,” said Brampton.
The Wine Drinkers initiative clearly has fresh, new role to play in the duty debate, and it is good to see the industry, and major brand owners, put professional competition to one side for the good of all.
* If you would like to get involved in the Wine Drinkers UK initiative then go to its website here and email email@example.com.