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Scrapping duty escalator could be bad news for suppliers warns Robin Copestick

Published:  19 March, 2014

Robin Copestick, co-founder of UK wine agency Copestick Murray, has sounded a warning shot about the Chancellor's decision to scrap the duty escalator in today's Budget and fears suppliers will be forced to take on the costs of inflationary duty increases rather than the higher costs under the escalator that were easier to pass on to consumers.

 

 

Robin Copestick, co-founder of UK wine agency Copestick Murray, has sounded a warning shot about the Chancellor's decision to scrap the duty escalator in today's Budget and fears suppliers will be forced to take on the costs of inflationary duty increases rather than the higher costs under the escalator that were easier to pass on to consumers. 

In a statement released to Harpers.co.uk Copestick said: "While I have no doubt that abandoning the duty escalator is good for the UK wine industry and the UK wine consumers I think we need an element of caution before opening a celebratory bottle tonight.

"When I was contacted by the lobbyists about scrapping the escalator I dutifully wrote to my MP and attended a meeting at The House of Commons. I was trying to support the industry that has been so good to me despite the fact that I had some reservations about what everyone was trying to achieve.

"These reservations stem from the painful memories of the early part of this decade when nominal duty increases were immediately followed by retailers requests/demands that suppliers and brand owners swallow the duty increase to leave price points and the retailers' margin in tact.

"This meant that for many years prices from producers to retailers decreased, prices on the shelf remained constant and retailers margins were untouched. Great news for the consumers, retailers and also for the Chancellor's target to manage inflation but terrible news for the suppliers and producers. It was wholly unsustainable and not good for the industry as a whole.

"This period of very low duty increases was the beginning of a huge degree of suspicion from producers about the UK industry and I hope that we don't return to those days. When the escalator was introduced the increase in duty was so significant that it had to be passed onto the consumer. Not good for the consumers but it meant the industry started to become more sustainable again.

"Despite the escalator now being scrapped the annual duty increase is still a consumer tax and needs to be treated as such."


* Do you agree with Robin Copestick? Share your views on the Budget by emailing Gemma McKenna on gemma.mckenna@wrbm.com or via Twitter on @HarpersWine

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