The Autumn Budget 2024, Our Response
Press Statement: Response from Andrew Bewes, Managing Director, Hallgarten & Novum Wines
"The enormity of this week’s budget statement will not be lost on anybody in the Trade. The ramifications are far-reaching and will hit all businesses where it hurts, none more so than the drinks, hospitality and retail sectors. We fought long and hard alongside our competitors and the WSTA to get the Government to see sense on duty, however, we must now turn our focus to how we help our Trade customers manage what will be very significant changes to their wine lists as many wines, significantly those of higher ABVs, break their commercial price points.
"Whilst the Government contend that the average consumer is unaffected by the budget and that the increase in National Minimum Wage will put a few extra pounds into the back pockets of many lower paid workers, the policies announced will help fuel a perfect storm for the retail and hospitality sectors with higher prices for wine and significantly higher staff costs with the increase in wages and Employers National Insurance Contributions. The inflationary pressure on business and ultimately consumers is inevitable, and this budget will have a material effect upon those eating out and drinking wine regularly.
"The end of duty easement has been on the cards for many months which has allowed us the time to make plans to implement these 20+ duty rates on February 1st. From a technical perspective, we are in a position to handle this. The real challenge splits into two: Firstly, wine lists across the country will change shape significantly as the vast majority of wines are sold at between 12.5% and 14% and the bonus duty rise of 3.25% further means that almost every other wine on an average wine list will also see an increase in price. This needs to be communicated and implemented and our sales team will be on hand to help their customers through this first challenge. Secondly, and in fact the bigger challenge will be to helping our customers manage the fact that they will have a constantly changing cost base as wines move from one vintage to another. These customers have broadly been used to having an agreed price to take them through the duration of a wine list, allowing them to print their wine lists and programme EPOS systems with the certainly of a fixed cost price. We should not blow the scale of changing prices out of proportion – the ABV of many wines stays pretty constant from vintage to vintage - but it will only take one or two wines to change price for a printed wine list to be out of date.
"Whilst the future may not have been made any brighter by the Budget, it is up to us to now manage the reality of the situation. Over the coming months we will be doing our utmost to support our partners through this and, potentially, the equally seismic impact of Extended Producer Responsibility. We will not stop fighting to protect and promote the wine, hospitality and retail sectors as we face a future full of challenge.
"We will be launching a communications plan this side of Christmas to ensure that all of our trade partners are fully aware of the impending changes, and of the ongoing issue of how changing duty rates will affect their businesses. And finally, as you would expect, we have already charged our buying team to source wines of lower ABV and, where possible and without compromising quality, to reduce ABV on selected wines, particularly at entry level. Many of these wines will be showcased alongside the latest additions to our portfolio at our largest-ever Annual Tasting, being held at Old Billingsgate on the 27th and 28th January 2025."
