Why is wine the alcohol industry's forgotten sibling?

By Dan Townsend

- Last updated on GMT

Wine is the second biggest category in all drinks retail, ahead of cider and spirits
Wine is the second biggest category in all drinks retail, ahead of cider and spirits

Related tags: Alcoholic beverage, Chancellor

While the rest of the UK was reverberating to the news of Chancellor George Osbourne’s decision to impose a levy on sugary soft drinks in last month’s Budget, the wine industry was again getting used to another year of being the alcohol industry’s forgotten sibling, enduring a duty rise while our friends in the spirits, cider, and beer industries enjoyed a freeze.

Even with last year’s most welcome duty freeze we were the bridesmaid, to their bride, thanks to their 2% cut.

If wine was an irrelevance to the consumer, perhaps I’d understand. But wine is the second biggest category in all drinks retail, ahead of cider and spirits.

If it were a bad corporate citizen maybe there would an argument to be had. But wine is hardly a slouch in this area, taking an active role in the Government’s Responsibility Deal; and last December TWE announced it will be providing calorie information across its portfolio​, one of the first drinks companies to do so.

So why does this happen? One argument I have heard is that wine is treated differently because it is not important to pubs.

Irrelevance?

The Chancellor in each of the last five Budgets when lowering or freezing beer duty has firmly attached the policy to the struggles of the Great British pub. This year he prefaced the freeze with the words: “I have always been clear that I want to support responsible drinkers and our nation’s pubs…”

Is wine really such an irrelevance to the modern British pub?

The pub industry is very close to my heart: I spent 12 years in the on-trade firstly at Scottish & Newcastle and latterly at Matthew Clark. The licenced trade needed the Government’s support then and it continues to do so.

But if supporting the brewing industry is so important in light of its symbiotic relationship with pubs – then why is wine cast aside? Is wine really such an irrelevance to the modern British pub?

As the traditional wet-led pub has struggled in the last 15 years, I have watched in admiration at the industry’s resourceful ability to adapt to the challenges, delivering new pub retail concepts that delight consumers. But undoubtedly it is food-led pubs that have led the way; and wine is its brother in arms – taking an impressive share of wet sales as a result.

Penalising

Wine is so important to the new era of pubs and bars, providing an important profit pool for licensees and managers. So why then is the Chancellor penalising the tens of thousands of licensees who are relying on that slice of income by increasing taxation?

Why is he penalising the diners who visit these pubs every night and the drinkers who responsibly share a bottle between friends over lunch on the weekend?

Yes, thousands of women enjoy a beer at the pub every week – but it is a statement of fact that many more enjoy a glass of wine. So are female pub goers also an irrelevance to George Osbourne or to those in the industry who seem to offer little in the way of opposition to these tax increases?

Surely we are all in this together? One to ponder over a responsible glass of Chardonnay at your local this weekend.

Dan Townsend is general manager Europe, Treasury Wine Estates

Related topics: Wine

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