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Hallgarten announces temporary duty increase respite for their customers
Specialist wine importer, Hallgarten & Novum Wines, has announced a significant initiative which will see it temporarily cover much of the increase in duty arising from the 1st August reform for its customers. The business is taking this extraordinary step to provide a short reprieve to hospitality and retail operators to allow them to get through the summer season without changing wine list.
The much-publicised change in duty regime is fast approaching, posing a serious dilemma for hospitality and retail businesses, and of course the companies which supply them. Whilst industry focus has been on the scale of the duty increases, it is the practical implications of the duty change that Hallgarten has turned its attention to. The timing of this change, during the height of the summer season, will be extremely challenging for all sectors, but particularly for hospitality. In practical terms, the scale of the rises means that simply increasing the price for each wine a customer takes is unlikely to work for many, meaning that most wine lists will have to be rewritten. Changing a wine list requires team training, production of new marketing materials and a change in stockholding – all of which is challenging in the middle of the holiday season.
Hallgarten Wines, this year celebrating its 90th anniversary, has got on to the front foot and is making a commitment to help its customers through this key sales period. Hallgarten will focus on supporting the ‘sharp end’ of their range, targeting wines selling on restaurant wines lists at under £30-£35 and on the shelf at up to £12.50-£14. The scheme will credit customers for the duty increase (44p per bottle ex VAT) on August sales of a selection of 148 still wines between 11.5% and 14.5% ABV currently selling to duty paid customers. Combined with a reduction in duty on lower alcohol, sparkling wines and Champagnes, it will allow many operators to delay overhauling their wine lists until September, cyclically a far less challenging time to introduce change.
Andrew Bewes, Managing Director of Hallgarten Wines, commented: “This is an extraordinary time for the wine industry and the sectors we serve, and we hope this initiative will help us and our customers deal with the operational challenge that the duty-change presents. We have been a very active and vocal campaigner against the change in duty regime, but since the decision was confirmed by HMRC and the detail announced, we have turned our attention to the practicalities of how to navigate such a significant change mid-season.
“We can generate the limited and finite funds to needed to take this extraordinary step by clearing additional stocks in July. Our hope is that this move, combined with the duty savings on sparkling wines which will be passed on to customers, should be sufficient to allow our operators to delay changes to their wine list until September.
“This measure gives us an additional option for customers allowing at least some to get through to September and then launch their Autumn/Winter wine selection at a far more appropriate time. In reality, some customers with storage space and funds will stock up in July, others will choose to change their list before the start of the summer season, some will change on August 1st, and others will now be able to get through to September with some help from us.”
Harking back to their popular ‘100,000 free glasses of wine for Hospitality’ campaign of 2020, Hallgarten estimates that this scheme will help customers to hold the price on the equivalent of between 1 million and 1.5 million 125cl glasses of wine!
Full details of the scheme will be released in June, including criteria for entry and terms and conditions of participation.