Mandatory code could hit fine wine merchants hard

Britain’s fine wine retailers would suffer a significant competitive disadvantage under the government’s proposed mandatory code on the sale of alcohol.

A suggested ban on discounts on volumes greater than a 12 bottles of wine would have major implications for fine wine merchants, whose price offers are almost entirely by the case, while failing to affect the prevalence of supermarket bogofs or single bottle promotions.

The Home Office consultation on a new Code of Practice for alcohol retailers includes a draft proposal prohibiting discounts on volume sales of beers, wines and spirits.

The suggested threshold for wine is nine litres, or a 12-bottle case (75cl), although it is thought this may even be lowered to six bottles.

“Fine wine businesses would be hit hard,” said Jeremy Beadles, chief executive of The Wine and Spirit Trade Association (WSTA), of the proposals, citing the wide range of promotional techniques from free delivery on case sales to en primeur volume-based discounts that would have to be dropped should the government introduce the retailing code of practice.

Furthermore, “it would not affect off-licences and supermarkets who sell very little, if any wine in case-volumes,” he said.

Of course if the threshold were reduced to six bottles it would prohibit any promotions for those merchants whose minimum purchase volume is 12 bottles.

The measure is designed to reduce alcohol-related harms, but fine wine and specialist merchants, as well as online and mail order companies – which would be unfairly affected by such a retailing restriction – are obviously not the cause of the problem.

As Beadles asked, “Surely these businesses are not the target in seeking to tackle alcohol related violence?”

Beadles is writing to the Home Office today to point out the unfortunate, if unintended consequences should this proposal be introduced.

Patrick Schmitt, 20.08.2009