Minister pledges to press ahead with alcohol reform

Home affairs minister James Brokenshire MP kicked off the Wine & Spirit Trade Association Conference by reaffirming the UK coalition government’s commitment to handing more power to local authorities in the fight against irresponsible alcohol retailing.

Speaking in his role as parliamentary under-secretary for crime reduction, Brokenshire also told delegates that any new measures brought in following the completion of the taxation review will be considered in the context of the potential harm they could do to an already-embattled UK drinks trade.

“We need to see more take-up of local government schemes,” he told delegates at the Bafta headquarters in London. “This local focus underpins our approach.

“We are adamant that central government should not be solely responsible and that local authorities will be at the centre of the decision-making process.”

Brokenshire explained that the government was aware that the vast majority of licensed retailers operate within the law, adding: “The new power we want to give local authorities is to help them in their battle against the minority of irresponsible businesses.”

He confirmed that the government is going to double the fine for selling alcohol to an underage customer to £20,000 and will ban below-cost selling, but said local authorities will not be required by law to enforce other proposals. “Our aim is to enable, not mandate,” he said.

Other speakers tried to find positives amid a raft of presentations illustrating slumping trade and slowing growth in the UK alcohol market, but as Jonathan Stordy, managing director Europe at Beam Global said: “The UK is the least profitable market in Europe.”

Stordy added: “This is a moment of crisis in terms of profitability in the UK.”

He criticised the UK’s apparent obsession with volumes rather than value, pointing out that in thriving markets such as Spain the leading retailers never consider discounting prices to sell more products, instead relying on creating value through selling at the regular price.

“Promise to deliver value to your bosses rather than volumes,” he said. “Otherwise you end up falling into the discount cycle which takes value away from your sales.”

Stuart Blunt, drinks industry analyst at Nielsen, told the conference that the growth of rosé wines, which had previously been driving growth in the wine category, has stalled.

Rosé sales now account for one in every eight bottles of wine sold in the UK, but the rate of growth has slowed for the first time in 10 years.

Blunt outlined that overall drinks sales value has risen 4% over the past year, but that figure was driven almost exclusively by inflation. He also explained that while wines in the £4-5 bracket is the fastest-growing sector within the wine market, those in the £3-4 bracket still sell the most.

He also warned that the UK should not look forward to a market recovery any time soon.

“With VAT going up in January, we will probably continue to see market slowdown in 2011,” he said.

Alan Lodge, 15.09.2010