Bordeaux wine trade demands €300m compensation for US tariffs

4th February, 2020

Bordeaux’s wine trade has asked the French government for a €300 million compensation fund to make up for losses incurred as a result of two trade disputes with the US.

According to the Bordeaux Interprofessional Wine Council (CIVB), exports of Bordeaux wines to the US fell by 46% in value and by 24% in volume since October 2019.

Speaking to French media during a press conference, chairman of the CIVB, Bernard Farges, lamented: “The US only puts a 10% tariff on European aircraft, but hits French wine with a 25% tariff. This means that a bottle of Bordeaux sold in the US for US$10 will become $12.50 or even $15 depending on the distributor, leading to a drop in sales.

“This compacts a decline in sales in mainland China, where Australian and Chilean wines have a competitive advantage with lower customs taxes than French wines. The situation in Hong Kong also jeopardises our trade.”

He also added that things were “very uncertain” with the UK following Brexit.

According to Farges, the French government has responded to requests for a compensation fund with a proposal for a Europe-wide fund. This has been rejected by the trade in Bordeaux. Farges told French media he wants the French president to guarantee that money would be paid to the country’s winemakers and growers.

While the US and France have agreed a tariff truce for a year in relation to a dispute over France’s digital tax, a 25% tariff remains in place as a result of a separate trade spat.

The US initiated the 25% tariff on still wine (not over 14% ABV) in October 2019. The tariffs currently affect wines from France, Germany, Spain and the UK, transported in containers of 2 litres or less. Liqueurs made in Germany, Ireland, Spain and the UK as well as Scotch whisky are also subject to an additional 25% tariff.

In December 2019, the US government said it may increase these tariffs by up to 100%, and potentially extend the list to cover sparkling wine, fortified and bulk wine made in all EU countries, as well as other whiskies made in Europe, most notably Irish whiskey.

At a CIVB crisis meeting held last week, Cédric Coubris, president of the Gironde federation of independent winegrowers, said that French growers had already lost €20 million due to the impact of tariffs in the past two months. He is expecting losses of €100m this year.

The CIVB says Bordeaux wines are being replaced with Italian wines in US supermarkets. It revealed that some businesses have already gone bankrupt as a result of the increased financial pressure, and it expects this to continue unless the industry receives government support.

Georges Haushalter, vice-president of the Gironde federation of independent winegrowers, called the losses “colossal”.

“It’s very significant because the US market is the second largest export market for Bordeaux wines, with a 4.5% market share.”

“Every day brings a new drama. We have containers ready to leave and customers who are telling us to delay the shipment.”

“It will be long, costly and difficult process to get our place back.”

Top drinks marketing campaigns and news in January

3rd February, 2020

Diageo launches Seedlip’s first ad campaign

Drinks giant Diageo has led the fight to keep sales buoyant during January by launching its first advertising campaigns in the UK and US for non-alcoholic ‘spirit’ brand Seedlip. It is the first time that Diageo has set up an ad campaign for Seedlip, after upping its investment in the popular non-alcoholic brand to a ‘significant’ majority stake in August 2019. Developed by Seedlip’s EU marketing director, Ben Thomson, alongside creative agency And Rising, it features the strapline: ‘Drink to the Future’, which sits above a bottle of Seedlip and is framed by the key botanicals that make up the booze-free ‘spirit’.

The campaign, which was launched on 13 January in London and Manchester, appeared in railway and London Underground stations, on buses, billboards and digital, while a separate digital campaign launched in the US based on making the brand applicable to “every” kind of drinker.

Diageo bought a 20% stake in Seedlip in 2016 through its Distill Ventures division, an incubator for emerging drinks brands that provides funding and guidance to help the companies boost their own profits and expand their reach. Emma Wykes, Seedlip COO, said: “We know people are looking for greater range when it comes to non-alcoholic choices, and we hope that with this creative we will inspire both new and existing Seedlip consumers.”

Hendrick’s releases limited edition Lunar gin

3rd February, 2020

Quirky gin brand Hendrick’s has released a limited edition ‘Lunar’ gin in the UK, which is due to go on sale at Harvey Nichols on 10 February.

Described as “distinctly floral with a delicate spicy finish”, the small batch gin is the second release from master distiller Leslie Gracie’s Cabinet of Curiosities at the brand’s Gin Palace in Scotland.

It follows the launch of Gracie’s Midsummer Solstice Gin in 2019.

According to brand owner William Grant & Sons, the gin was conceived “beneath the celestial light of the moon and yields an alluring complexity and a delightful warmth, which is best suited to refreshing sundowners and night-sipping”.

Gracie took the grounds of the Hendrick’s Gin Palace in the remote Scottish Ayrshire coast, within the Galloway and Southern Ayrshire UNESCO Biosphere, as her inspiration for the limited edition gin.

Here, away from the city lights, the stars shine bright and the moon makes its presence felt. Gracie felt compelled to create the gin on a  moonlit evening while tending to the botanicals in her hothouse.

“There is the warmth of some of the botanicals, like being wrapped up warm and snug of an evening. There is the rich aroma of night scented flowers and in the background you can just about make out the refreshing burst of citrus,” she said.

Sasha Filimonov, UK brand ambassador for Hendrick’s, suggests adding a pinch of black pepper to the gin to enhance its top notes.

“Lunar Gin lends itself to the addition of black pepper to accentuate the top notes of this gin. A stunning sundowner would be a Moonlight Buck, a combination of Hendrick’s Lunar, ginger ale and lemon juice, garnished with cucumber and a twist of lemon,” she said.

The 43.4% ABV Hendrick’s Lunar Gin will be available online and at Harvey Nichols from 20 February, followed by wider national distribution.

WSTA calls on trade to ’embrace a brave new world of trading’ following Brexit

3rd February, 2020

The WSTA has called on its members to ‘embrace the brave new world’ of trading following Brexit and to focus on the opportunities ahead, as it outlined its key priorities.

Chief executive Miles Beale said it was time to complete a trade deal with the EU and move on, as he reiterated the organisation’s top priorities and outlined the demands it is making of government.

“We need to focus on the opportunities and to steer government towards breaking down barriers on trade, while also reinforcing the UK’s position at the centre of international wine and spirit trading,” Beale said.

He said if practical steps were taken, the UK could keep its position as the number one spirit exported, but could also become the world’s largest wine importer, a position currently held by Germany.

“Our aim is to leave behind some clunky and outdated EU rules, while maintaining consumer confidence in the safety and quality of wine and spirits; and to find a way to free up trade through innovation and improved technology,” he said.

“Our ambitious agenda, combined with the support of government, gives us the opportunity maintain and improve our position as global leaders in the wine and spirit trade.”

The organisation has already put its list of ‘clear asks’ to government, after Beale met the Secretary of State for Exiting the EU, Steven Barclay, last month to discuss how the trade can work with government to benefit our industry, jobs, economy and consumers.

They discussed the importance of creating opportunities to benefit UK exporters, importers and ultimately UK consumers.

The WSTA said that while most EU rules need to be maintained to protect consumers and confidence in brands, there were some that were unnecessarily burdensome that could be  dropped,

For example, the WSTA is currently working with members on definitions of flavoured gin and low and no alcohol products, as well as looking at wine production rules.

One of the priorities was to maintaining the Excise Movement Control System (EMCS) that would help minimise disruption at ports, but the WSTA said the government can make trading even easier by using the latest technology. It argues that in the future the current electronic trading system used to track movements of alcohol to and from the EU electronically, which minimises checks at borders, could be extended in scope to include all imports and exports from the point of production through to retail.

 

BBPA appoints Molson Coors md as new chairman

3rd February, 2020

The BBPA has appointed Molson Coors Western Europe md Phil Whitehead as its new chairman, it announced this morning.

Whitehead, who has been on the BBPA board since December 2016, succeeds Simon Emeny, the chief executive of brewery Fuller Smith & Turner, PLC, who has chaired the UK’s brewery and pub organisation for the last three years.

During his 14 years at Molson Coors, Whitehead’s positions included chief supply chain officer for the brewer’s European operations and managing director for the UK & Ireland business before he became MD of Western Europe.

He described the pub and a pint as “a British institution woven into the fabric of communities across the country”, but said the sector was facing increasing pressures and challenges.

“The BBPA was a vital partner tackling these issues [and] as Chairman, I’m excited to play a role in protecting and promoting our unique industry.”

He said he would be working with chief executive Emma McClarkin and the team of industry ambassadors and innovators at the BBPA, to look at championing “new ways for our industry to remain a relevant, vibrant and valued part of the UK economy, while safeguarding the legacy of British beer and pubs – a cornerstone of our history and culture.”

Health organisations call for alcohol duty rise in UK

3rd February, 2020

Health organisations in the UK are urging the government to raise duty rates on alcohol, claiming that the “burden alcohol places on society is unsustainable”.

Balance, the North East’s regional alcohol office, has joined the Alcohol Health Alliance (AHA), a coalition of more than 50 UK health organisations, in putting pressure on the government to increase alcohol duty by 2% above inflation to ease pressure on public finances.

The statement said that recent cuts to alcohol duty have cost the government more than £1 billion every year – enough to fund the salaries of 40,000 nurses or 29,000 police officers.

Citing a study by researchers at the University of Sheffield, it also said that duty cuts have had “tragic consequences for public health, including nearly 2,000 more alcohol-related deaths in England since 2012.”

In 2009, the government introduced an alcohol duty escalator that raised taxes by 2% above inflation each year. Then-Chancellor Alistair Darling’s 2010 Budget planned to extend the duty escalator until 2014. However, it was scrapped in 2013 for beer, and 2014 for other drinks. A series of duty freezes for beer and spirits have been placed in the Treasury’s budget statements since.

Colin Shevills, director of Balance, the North East Alcohol Office, called for an end to tax relief on alcohol when the funds raised “could help fund the vital front line services most of us rely on,” adding that that alcohol places an “unsustainable” burden on the NHS.

A Treasury spokesperson told the drinks business: “Overall alcohol consumption has fallen in recent years, but we continue to look at the range of measures available to control excessive consumption through tax and regulation. Alcohol duties raise £12 billion to pay for vital public services like the NHS.”

“We keep the tax system under constant review. Any changes would be made at the Budget in the context of the wider public finances.”

What the researchers said

Last year, researchers were commissioned by the Institute of Alcohol Studies (IAS) to look into the impact this has had on the NHS. It found that cuts to alcohol duty since 2012 have led to a 1% rise in consumption in England.

According to the Sheffield Alcohol Research Group, this has led to nearly 2,000 extra alcohol-related deaths, compared to if the escalator had remained in place until 2015.

The study looked at data on alcohol consumption, consumer spending habits, consumer and supplier responses to duty changes, alcohol related hospital admissions and deaths, health inequalities, costs to the NHS and costs associated with alcohol-related crime and workplace absence. It claimed the cuts have led to over 61,000 hospital admissions since 2012, costing the NHS roughly £317 million, and has also generated an estimated additional 111,000 instances of alcohol-related crime, as well as an economic value of £58 million in lost working days for businesses in England.

Senior research fellow at the University of Sheffield’s Alcohol Research Group, Colin Angus, said that “due to the complex relationship between alcohol and health, the effects of government duty policy since 2012 will continue to be seen for many years into the future, estimated to be as high as 9000 additional deaths by 2032.”

 

The drinks industry’s stance

The call comes just days after the Wine and Spirit Trade Association (WSTA) issued a statement of its own calling for a 2% cut to alcohol duty in the next budget, claiming it would be a boon to the public purse.

Miles Beale, the WSTA’s chief executive, said last month that alcohol duty is “an important revenue stream for Government to fund public services, which is precisely why we are calling for a 2% duty cut on wine and spirits.

“A cut will not only boost Treasury coffers but also bring a boost post-Brexit to British businesses and consumers, whereas another rise will have a negative impact on all three.”

The Campaign for Real Ale, unsurprisingly, also regularly calls for duty freezes on beer. Following the Conservative party’s victory in the general election last December, UK prime minister Boris Johnson pledged to review alcohol duty rates as a way of supporting the country’s pub and bar sector.

CAMRA National Chairman Nik Antona, welcomed the news, claiming that beer duty in the UK is “disproportionately high compared to other leading brewing nations in Europe and 56% of consumers find the price of a pint unaffordable.”

Commenting on this week’s call to raise alcohol duty, however, Shevills said it is “ironic that the alcohol industry is benefiting from around £1 billion in alcohol duty reductions every year, while it costs the North East £1 billion a year to mop up the fallout from the product they are selling.”

He said the burden alcohol places on society is “unsustainable and we’re all paying the price.”

“In the next Budget, the government has an opportunity to act by ending tax cuts for the alcohol industry. We are urging them to prioritise public services, including the NHS, police and education system, and intervene to bring alcohol harms under control.”

Professor Sir Ian Gilmore, chair of the Alcohol Health Alliance UK, said: “Alcohol is 64% cheaper than it was thirty years ago, and its availability at these prices is encouraging more of us to drink at unhealthy levels. It is no coincidence that deaths from liver disease have increased in line with alcohol’s affordability in the UK.

“In order to protect the future health of our society, the government must take action now by increasing duty on alcohol and investing that money into our over-stretched and underfunded NHS and public services.”

Australian universities team up with growers to assess smoke taint

3rd February, 2020

Two of Australia’s leading wine science organisations are helping vine growers assess the impact of smoke taint on grape samples following the country’s devastating bushfires.

NWGIC Director Professor Leigh Schmidtke

Australia’s National Wine and Grape Industry Centre (NWGIC) and Charles Sturt University in New South Wales are working with the growers to test grape samples in order to help growers understand the potential impact of the smoke exposure on their vines in order to make decisions about the vintage.

It comes after Wine Australia recently reported that a maximum of 1,500 hectares of vineyards – around 1% of Australia’s total vineyard area – are within the regions affected by the blazes. The majority of this is from the Adelaide Hills in South Australia, the worst affected area, which was reported to have lost a third of its vines, the equivalent of 1,100ha, with damage also reported in the Tumbarumba region of New South Wales.

According to the university, growers can conduct sensory assessment of their wine to gauge the potential risk for smoke taint to develop, with grape grower associations coordinating the referral of the small-scale samples to the Charles Sturt Winery.

NWGIC Director Professor Leigh Schmidtke said the impact of ‘smoke taint’ depended on a number of factors including the growth stage of the vine and grape maturity, variety, how long the grapes are exposed, and proximity to the source of  the smoke.

“Conducting a small-scale ferment of potentially affected grapes allows wineries to undertake a sensory assessment of the wine to gauge the potential risk for smoke taint to develop,” he said. “This, along with analytical testing of grapes provided through commercial laboratories, will give grape growers and wineries information to make decisions ahead of harvest.”

The NWGIC is an alliance between Charles Sturt, the NSW Department of Primary Industries and the NSW Wine Industry Association.

See here for ways to help the Australian Wine Industry in the wake of the fires.

 

Michelin-starred The Square closed mid-service

3rd February, 2020

Michelin-starred restaurant The Square in London, which is owned by restaurateur and businessman Marlon Abela, was closed mid-service last week after administrators seized the site.

As reported by The Staff Canteen, customers and staff were asked to leave The Square in the middle of lunch service on 31 January as administrators were reported to have seized owner Marlon Abela’s assets.

It is believed that staff were aware of the restaurant’s difficulties after Abela faced bankruptcy charges back in October last year. However, they were not given any warning that the restaurant was to be closed nor have they been paid for the month of January 2020.

A statement given to The Caterer by administrators RSM reads: “At this stage in the process, it is too early to comment on our strategy for the administration.

“We are working closely with management and staff in seeking a positive way forward. We understand that the current situation is uncertain for many staff members across this group of businesses and we will be looking to provide clarity as soon as we can.”

Abela’s restaurant group MARC also owns private members’ club Morton’s, which is also reported to have been closed. His other London restaurants – The Greenhouse and Umu – are believed to still be open.

In 2014, Abela bought a controlling stake in UK independent wine merchant OW Loeb. In 2017, all of the company directors left the business and the company did not hold an annual portfolio tasting. However, it was later announced that OW Loeb was not closing, but would be relocating to Mayfair. There have been no information released as to whether The Square’s closure will affect the fine wine company.

First opened in 1991 by chef patron Phil Howard, The Square moved to its current Mayfair location in 1997. The following year it won two Michelin stars, retaining them for 19 years until Howard sold the business to Abela in 2016.

The kitchen is now headed up by Clément Leroy, who took up the role in November 2017 after the restaurant re-opened after a refurbishment.

According to reports published by Big Hospitality, it is rumoured Leroy, together with his wife Aya Tamura, who is the restaurant’s head pastry chef, and many of the kitchen staff, had stopped working at the restaurant three weeks ago, with the head chef of Morton’s taking over.

the drinks business has contacted MARC group for comment.

Sparflex and Enoplastic join forces to create ‘global leader’ in closures

3rd February, 2020

Closure and packaging specialists Enoplastic and Sparflex have signed a strategic agreement to create a “global leader” in wine and spirits closure solutions.

According to a statement, shareholders of both companies have agreed to merge in order to gain a greater market share.

Italian firm Enoplastic was founded in 1957 and produces capsules, synthetic corks, screw caps and seals, all of which can be designed and customised for clients. Sparflex, based in Epernay in the Champagne region, was established in 1984, and makes a range of foils, wire hoods and capsules for the sparkling wine industry.

Private investment firm Cobepa, which has a majority stake in Enoplastic, the Moglia family, who are also investors in Enoplastic, and the Soutiran family, who founded Sparflex, will all continue to be “heavily involved” in the company.

Michele Moglia has been appointed the CEO of the new company, while Pascal Soutiran retains his current responsibilities for France and Spain.

A statement from both families noted: “This merger supports our strategy of being as close as possible to markets, and it expands and enriches our ranges of products and services.

“The pooling of our human and industrial resources strengthens our ability to innovate, to be attentive and to put forward proposals to our customers and give them access to an ever more creative offer which is better suited to their needs.”

The new company has 13 production sites across six countries and operates in over 90 countries.

Brands within the portfolio include Enoplastic, Sparflex, Le Muselet Valentin, Rivercap, Maverick, Vintacap and Pacifix.

Two men charged with theft of whisky worth £9k

3rd February, 2020

Two men have been charged with carrying out a series of raids and attempted thefts targeting alcohol shops and distilleries across Scotland this month.

Mihai Craciun, 27, and Alexandru Iovanescu, 26, both from Falmouth in Cornwall, have denied being involved in four separate reported thefts.

Appearing at the Elgin Sheriff Court on 30 January, the pair are accused of carrying out thefts on 28 January and 29 January in the Aberlour, Dufftown, Tomintoul and Aberfeldy areas.

According to a police statement, the value of the whisky stolen amounted to around £9,000.

Among the premises targeted was the Cardhu Distillery near Knockando, The Whisky Shop in Dufftown, The Whisky Castle in Tomintoul and Aberfeldy Distillery in Perthshire.

the drinks business understands that the pair were spotted as far south as St Andrews in Fife, but by that stage CCTV footage had been widely circulated among shops in the area, preventing further thefts.

Craciun and Iovanescu are set to return to the Elgin Sheriff Court on 28 April.

PC Lisa Warren of the Forres and Speyside Community Policing Team, commented: “I would like to reassure our communities that officers will respond to any reports of theft and will conduct thorough enquiries to not only recover the stolen property, but to bring those responsible to justice.”