UK government destroying wine trade laments Benchmark Drinks MD
Speaking candidly to db as part of its Desert Island Drinks podcast series, Paul Schaafsma, MD at Benchmark Drinks, expresses his dismay at the UK government’s “destructive” approach towards the wine trade.
When asked about the current state of the UK trade after a successful 25-year career in the wine industry, Schaafsma – who represents Kylie Minogue Wines – said, “I think the government couldn’t do more to destroy the beautiful industry that we have.”
Continuing, he commented on the huge financial and administrative burden of not just tax increases but also complex packaging waste schemes as part of the newly-imposed Extended Producer Responsibility (EPR) project, such as Packaging Recovery Notes (PRN), which wine importers must buy to meet recycling targets.
“We can only take so much: there’s been the latest round of duty increases, and the EPR and the PRNs, and all the costs from that, which are getting passed on to the consumer – it is just so destructive,” he said.
He then said of the current UK Government, “They don’t realise the impact that it’s having on the industry.”
As for his London-based business, he commented, “We’re very lucky; we’re still growing strongly, and we’ve got brands that are growing, which is terrific, but there are a lot of people in this industry that aren’t in growth that are having a really tough time.”
And considering the harm being done to businesses by government policies, Schaafsma believes that the wine trade must speak up, and more loudly.
“We need to have a stronger voice about how much damage is being caused by people who don’t understand our industry,” he stated on the podcast, in which guests reveal the eight drinks, book and sole luxury they would take if cast away to a desert island.
Noting that those companies suffering the most right now tend to be “smaller business with entrepreneurs at the helm”, he said “there is a real risk that the industry could consolidate even further,” which would “narrow the choices” for consumers.
Nevertheless, he also expressed his optimism, commenting that “there’s always a challenge” and you have to focus on “finding solutions”.
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“I always say to people the answer’s ‘yes; now what’s the solution?’ So let’s work from that: we’ve just got to be resilient, and we’ve just got to keep thinking about how we deliver for our precious consumer,” he said.
As part of that, he commented, “We do need to speak up and be more vocal about the damage that the government is doing to this precious industry.”
But it’s also about tapping into consumption trends, one of which is lower alcohol drinks and zero-abv wines, believes Schaafsma, which is “the biggest trend at the moment”.
Supporting this view, he recorded, “We have Kylie Minogue 0% sparkling rosé and white growing at 20% year on year.”
Also, Schaafsma has just launched The Petit Rosé, which is a pink wine with 7% ABV, marking the Kylie brand’s first foray into the ‘lighter wines’ category, and this new product has already become the UK’s best seller in the sector.
As a result, Schaafsma said that the low and no category of wines “will probably become 25% of our business.”
He continued, “So that tells you that consumers are changing – they’re 18- to 25-year-olds who just don’t drink or they’re zebra striping and they’re moderating… They’ve got no problem drinking 0%.”
And he believes that “there is an old guard that needs to embrace that change, and not keep saying, ‘no it’s not part of our industry’.”
He added, “It is, and it’s not going away…. It will continue to develop, and we’ve got some very exciting things happening next year which, which revolve around 0%, and developing that offering.”
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