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WSTA members angered by lack of support and other "freeloading" businesses in the trade

Published:  13 May, 2015

The WSTA has called for more drinks businesses to take up membership and support the trade organisation as some members that have been contributing to the body feel that other business in the trade are "freeloading."

The high-profile company bosses on the Wine & Spirit Trade Association's board pull no punches as they tussle over the myriad issues bearing down on the industry.

Duty, minimum pricing, retail standards, licensing regulation - not one meeting is short on debating points and there's a risk the 'any other business' part could be longer than a seven-year-old's list to Santa, such is the pace of change and challenge the trade faces.

But at last week's board meeting at the WSTA's London office, the agenda took a different turn as the heads at some of the largest drinks businesses took aim at those within the trade, rather than those on the outside.

Instead of taking on the health lobby or overzealous policymakers, the gathered representatives' anger was directed at other wine and spirits companies who are accused of "freeloading" from the benefits the trade body delivers without paying in and refusing to become members themselves.

"All the businesses gathered around the table are livid," says Paul Schaafsma, general manager for the UK, Ireland and AMESCA at Accolade Wines, summing up the mood of the meeting.

"Given the huge amount the WSTA has done for the industry, I am astonished by the number of companies that refuse to contribute to its efforts. The amount that its work has saved the trade in duty, glass recycling and other areas more than makes up for what businesses would pay in membership fees and with their contribution it could do more lobbying on our behalf.

"Like other board members, I am fed up of constantly paying for a service others aren't. The case for joining has never been stronger and it's time freeloaders taking all the benefits without making any contribution themselves took some responsibility."

Michael Saunders, chief executive at Bibendum PLB, feels just as strongly that companies not contributing to the coffers should be shamed into signing up for membership, which is calculated as a percentage of turnover.

He says: "There is a core group that gives money to support the WSTA and it drives me absolutely nuts people are getting all the benefits for nothing. It is very important that the industry has one strong, consistent voice and the WSTA has saved an enormous amount for every business in the industry. We can't stop non-members from not signing up, but I think it's time we named those who won't."

Benefit of £350m savings

According to chairman Denis O'Flynn, managing director at Pernod Ricard UK, the WSTA has saved the trade £350 million a year, a figure he believes supports the board's position that more companies owe it to the association to join to enable it to do more.

He says: "From the outset of my chairmanship one of my key priorities has been to ensure that the WSTA represents the whole industry. This for me has a number of benefits: it gives those in the industry without a voice the opportunity to contribute, it broadens the view of the industry and it increases the resources of the WSTA both financially and otherwise.

"Sections of our industry are benefiting from these initiatives while not contributing financially or otherwise. It was felt by the WSTA board that this cannot continue - a position I support. So we are challenging those enterprises to join the WSTA and to contribute."

It's not only suppliers who back putting pressure on non-joiners. Dan Jago, Tesco's global head of wine, says he is "astonished" that businesses - many of Tesco's suppliers - have refused to sign up.

He adds: "I find it strange that membership of a body working so hard for the greater good and protection of the whole wine and spirits industry should be considered optional by some companies. In effect they are deliberately taking a ride on the back of the vast majority of the trade who recognise the great value the WSTA represents. Astonishingly, even after an intensive recruitment campaign, there are still a few large retailers and distributors on the membership naughty step. Lets hope they become members soon."

Virgin Wines' chief executive Jay Wright goes further, describing membership as a "moral" duty.

"I believe that the WSTA does an excellent job in representing our industry and influencing policy on our behalf," he says. "Therefore I feel there is a moral obligation for Virgin Wines to support the WSTA through our membership. If other businesses don't sign up I assume it's because they don't believe the WSTA adds value. I wouldn't want to feel our business needed to be subsidised by others in the industry."

A different view...

But not everyone in the trade agrees membership represents their best interests.

The WSTA's "Top 30 companies to target" list, seen by Harpers, features many leading names including Berkmann, Negociants, Liberty Wines, Les Grands Chais de France, Copestick Murray and Ehrmanns.

Another company absent from the membership database is Oddbins, where managing director Ayo Akintola is resolute that his business won't be pressured into joining an organisation he feels lacks credibility.

"The WSTA can bugger off, they moan about companies not signing up but they run it like a tight-knit club for establishment figures only," he says.

"It's all well and good them saying others are reaping the benefits of their work, but when was the last time they went on a recruitment drive to get new members? We have never been approached about membership. They are surely naïve to believe that without a recruitment plan for new members people are just going to rock up and cough up £10,000 to join.

"It seems to be an establishment organisation with establishment figures and I don't think they would want the likes of renegade Oddbins in their midst, which is fine because as you know Oddbins doesn't do establishment, we tend to stick two fingers up to it."

He adds: "It is silly of them trying to guilt companies into joining when the more sensible thing to do will be to actively court companies and show their relevance."

While Akintola might be moved on to the WSTA's "never darken their door again" list, some companies indicate they might be more receptive, but still highlight fundamental concerns with the organisation's focus.

Robin Copestick, managing director of Copestick Murray, admits he could be open to a persuasive argument, which O'Flynn is confident he will make during his chairmanship.

Copestick says: "I firmly believe that the WSTA is a well-run organisation and in the past few years has done many things that have been very beneficial to the UK wine industry. Having said that, I do believe many of the benefits are geared to bigger companies than Copestick Murray. I am also not in total agreement with how the yearly subscription fees are worked out. However, I have a very open mind to Copestick Murray being an active member of the WSTA in the future."

The WSTA is adamant its fees structure is transparent and fair, with a tiered scale meaning a business on a turnover of up to £1 million would pay £879.90 a year, going up to £54,652 for those nearer £300 million.

For David Gleave MW, managing director at Liberty Wines, it's not the cost, but a decision to channel its efforts elsewhere that remain a barrier to membership.

He says: "We support the work being done by the WSTA, but have decided to focus the limited amount of money we spend on trade bodies entirely on education. We will continue to publicly support WSTA initiatives like the successful campaign to eliminate the duty escalator, but will also continue to follow our own path."

Despite the collective might of the WSTA's board member companies, one of the ongoing issues for the association remains its inability to garner the support from the trade's "grass roots", independents, craft distillers and English wine producers.

There are also those who simply reject the WSTA's Miles Beale's claims that the recent duty freeze on wine represented a victory, and are frustrated the body doesn't go further and apply more pressure.

As one lapsed member says: "The duty result was a joke. If the WSTA honestly thinks that it has really helped, as opposed to just riding on the coat-tails of beer, then I'm astonished. There's no way I would pay in again."

It's a claim that WSTA chief executive vehemently refutes. He adds that, with a new government to court and fresh battles on the horizon, he needs the industry's support now more than ever.

"I believe we can do more - and will need to - over the next few years and under a new government, but we need more members to allow us to do so," he says.

"These are two very compelling arguments we will be using to attract more companies to join the WSTA as part of a concerted recruitment drive in the next few weeks and months. My plea is to join us - and to help us to help you."