Drinks trade can flourish by championing British products

11 November, 2016

The drinks industry can thrive going forwards by championing British products and continuing to work in partnership with government on social policies, according to leading trade commentators. 

Gloom has lingered over the industry since the Brexit vote sent sterling plummeting, but the trade has been urged to focus on the positives and see it as an opportunity. 

Industry lobbyists also believe the trade is well positioned to secure a fair deal with the new government led by Theresa May, who has praised its work around the Responsibility Deal.

Graham Evans MP, new chair of the All-Party Parliamentary Beer Group, which teamed up with OLN to host the Celebrate British Beer awards, said: “[The weak pound] is good for British beer because it will be more attractive for UK retailers and better for exports. A weak pound should bring more tourists to the UK and they will spend money on British beer.”

Gabe Cook, communications officer at the National Association of Cidermakers, said the EU is now almost certain to abandon efforts to force Britain to stop giving a tax break to small cidermakers, something that contravenes EU law but preserves the heritage of the industry. 

Richard Balfour-Lynn, owner of Hush Heath winery, said: “Brexit will give us a competitive advantage over the next few years and it will be a great opportunity to get people drinking more English wine. It also gives us control over duty. It’s a great opportunity.”

Ian Kellett, founder of Hambledon Vineyard, added: “English sparkling wine will substitute 50% of Champagne in 15 years’ time. Prices of Champagne have gone up from £29.99 to £39.99. When they go up to £49.99 [due to exchange rates] people will go to English sparkling wine. Even if you can get it discounted to £35, you will still get better quality English sparkling wine for less.”

Exchange rates

Jay Wright, managing director at Virgin Wines, said he will not be putting prices up and urged the trade to draw the focus away from exchange rates. “I get a little bit irritated with the wine trade managing to talk itself down all the time,” he told OLN. “I won’t underestimate the effect exchange rates have on our pricing, but it’s only one aspect of how we run our business. In so many ways this is the best time ever for us to be in business. We have this wonderful product, essential to the fun and social part of people’s lives, and we are having a digital transformation. Pricing becomes more difficult, but we have to adapt. There are all sorts of things you can do to maintain your profitability when something goes against you.”

Theresa May was in India this week with the Scotch whisky trade in a bid to boost exports, and Henry Ashworth, chief executive at the Portman Group, said the new prime minister could be good for the industry. 

He worked with her on the Responsibility Deal when she was home secretary and she hailed the industry’s successful pledge to strip a billion units from shelves.

At a recent prime minister’s questions, May reminded the audience: “As home secretary I was part of the development of the alcohol strategy that the government produced a few years ago. 

“I’m pleased to say that at that time we were working well with the industry to encourage it to ensure it could take steps to impact on the drinking habits of the nation.”

Ashworth said: “It’s great that the prime minister is still endorsing the initiative she supported then. That bodes very well for partnership working with the Home Office and the Department of Health going forward.”

At a recent Westminster social policy debate on the future of alcohol policy, MPs and public health officials were presented with figures showing drinking rates are constantly declining. 

“It’s a fact that alcohol consumption in the UK is decreasing, but 64% of the public just do not believe that, so there’s a job to do,” said David Wilson, public affairs director at the British Beer & Pub Association.

Positive move

Another positive development is that the industry is sitting back around the table with the DoH in an effort to resurrect the Responsibility Deal. It was started under the coalition government but has been on hold for a year. “I am glad to be talking about the future of partnership working and how we can continue to communicate important information to consumers,” said Ashworth.  

“Some extraordinarily good things have been achieved under the Responsibility Deal. Firstly, the drinks industry made a commitment to remove a billion units of alcohol from the market, by improving the range of lower-abv products available, and really looking at the relationship between container sizes and the drinks in them. 

“The other really significant issue was that the industry committed to, then delivered, 80% of products on shelves carrying agreed health messages from government – CMO guidelines, number of units in a container and pregnancy warnings. Ninety-three per cent of products now carry a pregnancy warning. This has been carried out voluntarily in an agreement between government and the drinks industry.”

Ashworth continued: “There are many people who need recognition for the work they have done with the Responsibility Deal. Government didn’t quite go far enough in recognising the companies and the individuals within those companies that really pushed through significant changes. To achieve a billion units of alcohol removed from shelves – which by the way is now 1.3 billion and rising – required brave companies to bring new products to the market and to reformulate well-loved products already on the market, and it required brave individuals to challenge the way their companies had gone about business in the past.”




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