A CUT or at least a freeze in alcohol duty in next month’s Budget could benefit the Scottish on-trade amid what continue to be challenging trading times.
Scotland’s major wholesalers and suppliers have called on chancellor George Osborne to reduce duty on March 18, claiming any increase would have an adverse effect on businesses which are already feeling the effects of the lower drink drive limit, which came into force in Scotland on December 5, 2014.
Billy Bell, managing director of Wine Importers, said: “I’d like to see large supermarkets having less influence and at least a freeze on duty to help our hard-pressed on-trade.
“It is very challenging for operators at present and that is why we are using improved foreign exchange rates and the reduction in fuel costs not to increase our normal list prices this year. There is no real reason for wholesalers to impose price increases on their customers, outwith any Budget change, in the foreseeable future.”
Mike Howard, trading manager at Ooberstock, agreed that a freeze or reduction in alcohol duty “would be welcome”. “This should stimulate the on-trade and help bring people back into pubs,” he said.
Toby Sigouin of Inverarity Morton highlighted the disparity in duty on wine in the UK compared to the rest of Europe.
“We would like to see a freeze on duty,” he said.
“In terms of wine duty it is already much higher than in most other European countries.
“As wine pricing has been relatively stable this year globally, a freeze in duty would certainly be a small comfort to those customers, especially rural outlets, who have been affected by the lower drink drive limit. For the wholesale sector it would allow wine pricing to remain very similar to that of last year, which will obviously keep customers happy.”
The effect of any changes in duty on the price of wine in particular could have a big impact as wholesalers highlighted the category’s increasing popularity in the on-trade.
Iain McPherson, sales and marketing planning manager at Matthew Clark, said wine sales are going from strength to strength.
“We recently saw that wine has overtaken beer as the UK’s preferred drink, and wine continues to be one of our best-selling categories,” he said.
“We’re looking forward to bringing our new wines in this year and highlighting them at our ‘Uncovered’ tasting [events] in March.”
McPherson also highlighted spritz-style drinks and cocktails as an opportunity for publicans to boost sales, and predicted strong Champagne sales throughout 2015.
Bell at Wine Importers agreed that premium products, particularly in the wine category, are a potential avenue for licensees looking to boost sales.
“Good wine names and recognised producers are commanding a premium with consumers prepared to pay a little more for the enjoyment and reassurance they offer,” he said.
“We are strongly recommending the smaller glass and a better wine in it to our customers this year.”
Julie Dunn of Dunns Food and Drinks also said she expects premium brands to perform well in the on-trade this year. She suggested publicans could benefit from the so-called “weekend millionaires”, who she said “ensure that when they do go out they want a premium offering”.
And Dunn said wholesalers are well-placed to help operators deliver customer service to match the premium products.
“Companies need to ensure that every process which they undertake and every member of staff is customer-focused,” she added.
“Customers have high expectations.
“Over the last year we have created our Wine Academy, the first three modules of which every member of staff is charged with attaining. This is also available to our customers.”
The importance of staff training was underlined by Sigouin at Inverarity Morton, who said it is an area the firm invests “very heavily” in.
“The wine knowledge of our customers and their staff is vastly higher than it was 20 years ago,” he said. “They are far more interested in current wine trends, in stocking lesser-known varietals and in generally having a wine range that is specific to their venue and customer base.”
And premium wines are not the only ‘must stock’ products of 2015.
Graham Baird, sales director at Belhaven, highlighted the growing trend for beer and food matching and the opportunities it presents.
“With beers ranging from a clean, crisp craft pilsner through to smooth, deep Belhaven Black, we have beers to match all sorts of foods,” he said. “We offer recommended food matches with every one of our beers and, for this year, we have reviewed these to ensure we are highlighting Scottish foods to go with our favourite ales.”
And Matt Munro, on-trade sales director at Wallaces TCB, highlighted growth in low ABV and alcohol-free beers.
“There has been an increased demand for low and 0% ABV beers and ciders both due to recent legislative changes and also changing consumer taste,” he said.