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Richard Siddle, comment, July 2: it's time to talk

Published:  02 July, 2010

There was a collective sigh of relief across the trade last week when for the first time, it seems, in living memory there were no duty rises in a government budget.

There was a collective sigh of relief across the trade last week when for the first time, it seems, in living memory there were no duty rises in a government budget.

But we should not delude ourselves the alignment between revenue raising and alcohol duty levels won't be back on the agenda the next time the Chancellor steps up at the budget dispatch box.

He did use last week's emergency budget to fire a warning shot across the drinks industry's bows that it intends to carry out yet another review of alcohol policy. This time alcoholiic drinks with high abvs and those deemed to be associated with binge drinking will be on the agenda as well as the issue of low cost selling.

But it would appear from initial exchanges between Whitehall officials and the trade that this government appears as confused about what minimum, low cost or fair pricing actually means as its predecessor.

Off more immediate concern is the fall out from the so called austerity budget. The VAT rise to 20% in January will have a knock on effect on drink prices. But more worrying are re-newed fears of a double dip recession, even more turbulent currency markets and an increasingly pessimistic if not down right scared consumer.

The impact of all this is being felt right through the supply chain down to vineyards and distilleries.

Wineries are faced with the ultimate dilemma. Uproot and get out of wine altogether, as many are being urged to do in Australia, or upscale and try and attract better margins by targeting the independent and restaurant sectors.

But not an easy choice for those who have invested in selling large volumes of wine at whatever price they can get in the supermarkets.

We may have survived a duty rise this tine round but that does not change the fact the industry needs to look at deep rooted structural changes from vine to glass, winery to shelf.

Harpers today announces plans to hold a global conference on these key issues on the day of the IWC dinner on September 7. We would welcome your support.

As one canny marketing guru once said "when you can't change the subject you enlarge the issue" and that is what we intend to do.

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