Action, not reaction

03 October, 2013

If alcohol were to be outlawed in the UK, 2.2 million people would be out of work and there would be a £16.3 billion hole in the chancellor’s tax revenues.

It would be enough to make George Osborne need a stiff drink – he likes a tipple, if staged pictures of him enjoying a pint in virtually every pub in Britain after scrapping the duty escalator on beer are anything to go by – as Britain’s economy would collapse.

He wouldn’t find one, and neither would the gangs of unemployed, disenfranchised off-licence workers, supermarket cashiers, bartenders, taxi drivers, kebab makers, licensing officers and drinks journalists looking to blow off steam.

Without pub quizzes, comedy nights, live music, sporting events, films, festivals and all the other things alcohol sponsorship supports to entertain these people, idle hands would abound and anarchy reign.

The government, struggling to make up £16.3 billion in cuts from the likes of the NHS and the welfare system, would probably be forced to legalise something else to fill alcohol’s void and provide recreation for the masses.

Perhaps opium dens would spring up, or heroin and cheese parties would become de rigeur. Either way society would probably end up broke, crime-ridden and wishing alcohol had just been left alone in the first place.

That may all sound a bit extreme, but the fundamental role the drinks industry plays in the economic and social fabric of society cannot be overestimated.

That is why Miles Beale, chief executive of the Wine & Spirit Trade Association, reiterated these headline-grabbing figures from the Office for National Statistics at the trade body’s annual conference and urged the industry to become louder and bolder to combat lobbyists and politicians who aim to halt growth with Prohibitionist measures.

“We can rightly be proud of our economic contribution. As an industry we give an awful lot,” said Beale, pointing to the taxes, jobs and the “pleasure our products give”.

It certainly is impressive ammunition to use against those pushing for advertising bans and minimum unit pricing. But he warned the trade needs greater unity, adding: “United and resolved, we are an industry to be reckoned with. When we mobilise as an industry and when we have a clear voice we can change people’s minds.”

Beale claimed the government’s decision to scrap its proposed MUP scheme as a victory for the WSTA and – despite many within the industry being in favour of the scheme – used it as an example of the trade uniting to bend government policy towards its own means.

He said: “There was an imminent threat attheendof2012–theideawastohavea short consultation period at the busiest time of year for the industry and MUP would be in place before Christmas. We convinced them to give us more time. We were able to bring all of the weapons at our disposal to focus and change people’s minds.”

Beale believes the WSTA made its case well through the “Why should responsible drinkers pay more?” campaign and hailed this as the key reason the initiative was axed.

His colleague Nick Hyde, WSTA chairman and managing director at Diageo Wines Europe, agreed, adding: “‘Why should responsible drinkers pay more?’ has proved a successful campaign for our industry and certainly was fundamental in the way it was executed in putting MUP on hold.”

The WSTA is now looking ahead to further battles. It aims to see the duty escalator scrapped on wine and spirits through its Be Fair George scheme – which could lead to pictures of Osborne grinning while drinking at every single distillery and wine bar in Britain if successful.

But Beale wants the industry to be more proactive, to push boundaries, pick fights and shape the legislative landscape to its own ends rather than just waiting for the health lobby’s assault and struggling to defend against it.

“One of the first rules in political theory [focuses on] the benefits of setting the agenda so it’s dangerous for us to sit back and let politicians set the agenda,” he said. “We have been guilty of that before but we should not do that again.

“We have been reticent to make our case publicly but [on the issue of MUP] we had no choice – we couldn’t stand back and let these things happen.

“The 2015 general election will be the next big stage for the alcohol policy debate. We need to be responding actively to politicians but also making the case ourselves. This is where we need to get better.”

Barry Clark, account director at consumer insight firm Future Foundation, told the conference he would be “astonished if there weren’t further efforts from the government on MUP” because “the government has always tried to curb behaviour in the name of the common good”.

Beale called MUP “a barrier to growth” and urged everyone connected to the industry – all 2.2 million of them – to start shouting and strike the first decisive blow ahead of the next election. “Constituency MPs need to know it matters to us, our employees and to their voters,” he said.

A future where machines rule

In the future consumers will never miss another deal as sophisticated online robots take over shopping completely, according to a consumer insight firm that investigates tomorrow’s trends.

Barry Clark, account director at Future Foundation, said consumers are moving towards a safe world of making shopping decisions based on advice that marks “the end of adventure”.

He believes consumers are turning against peer review sites such as Tripadvisor and seeking expert advice from trusted sources, such as the website My Sommelier, which helps you select the right wine for the right dish.

“I recently looked at three wine websites,” said Clark. “The Wine Society was offering 1,500 wines, Majestic was offering 1,329 and Tesco was offering 709. In a way this is a fantastic world of choice, but it’s a problem for some consumers to choose one. Consumers are looking for help in an easy, convenient and hopefully free format.”

He said consumers will soon start to “out- source” decisions to a “smart agent”.

‘Smart’ is an acronym – “system for man- aging agents in real time” – and these tools are fuelled by artificial intelligence to take over your shopping decisions.

“Smart agents will initially appeal most in low interest markets like utilities and then become increasingly disruptive,” said Clark.

“They will think about employing it in financial services. People get used to the idea and it rolls forward into other areas.

“People will have to compete more strongly on price as the smart agent will be looking for the best deal. It’s the most promotionally-responsive thing you can imagine.”

Barry Clark from the Future Foundation

He said it could lead to “a world in which you don’t know who insures your car because it’s provided by your smart agent” and warned brands could suffer “in a world 

where decisions are driven by machines” that feel no emotional attachment.

“The balance between retailer, producer and consumer tips increasingly in favour of the consumer,” Clark added. “Any number of apps allow consumers to scan price deals. There is no missed deal in the future.

“It’s easy for consumers to live this type of lifestyle. There is significant technological availability to help them – 12.5 billion prod- ucts were connected to the internet in 2010. By 2020 it will be 50 billion.

He said producers would have direct communication with consumes. “This shifts the balance of power away from the retailers and towards the producers themselves.”

Laithwaite’s chief executive Simon McMurtie, a direct-to-consumer pioneer, said the firm is already employing 150 peo- ple to deal directly with consumers asking for recommendations.

When OLN asked how retailers can fight back, Clark said: “The data they have is just sitting there for them to use. There’s also an opportunity to become more involved in e-commerce.

“And the retailer still has the advantage of aggregation and putting things in one place.”

Huw Pennell, managing director at Maxxium, said: “You could argue that the retailer is already a smart agent.

“People will always be attracted to a deal – I don’t think that will ever go away – and price is always going to be important, but the challenge is to make the conversation about other things.”

And Rebecca Smart, chief executive at book publisher Osprey, offered independ- ent wine merchants some hope by saying: “In the book world independent retail has stopped declining. They are opening up as a place to go and to take your children, a place to browse and enjoy yourself and then you will hopefully walk out having bought something.”

Industry under threat

The head of the Telegraph likened lobbyists using the actions of the few irresponsible drinkers to punish the majority through measures such as minimum unit pricing to campaigners trying to use phone hacking to squash Britain’s free press.

Lord Black of Brentwood told the WSTA conference:“We are both industries under constant threat.

“Threats of ever-increasing statutory regulation and red tape, the threat of interference from Brussels, and the unremitting pressure of well-organised and zealous lobby groups.”

He said the way to fight back is through a united industry, and he praised the Portman Group for its work in setting the agenda.

“It’s a fine model of self-regulation,” he said, adding that the newspaper industry can learn a lot from the Portman Group as it begins to overhaul the Press Complaints Commission.

But he warned:“It won’t work unless the industry is fully behind it.”

Black, who described himself as a “good customer” to the industry, added that “there are no silver bullets – certainly not minimum unit pricing – to tackle alcohol abuse”.

He said detailed work would be needed from the industry and from institutions such as Community Alcohol Partnerships.




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