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LWF: Lead time issues ‘probably temporary’

That was one of the weightier issues discussed at the London Wine Fair (LWF) briefing, Wine Trading 2021: “Are we there yet?”, which was hosted by Miles Beale, CEO of the WSTA, who cited lead times as “one of the biggest complaints or problems” seen by the trade body. 

“It might be for the case of EU wines that you're trying to import because of Brexit. Then again, suddenly you have ships going sideways in the Suez Canal and that does the same for lead times from other parts of the world,” said Beale.

Putting it to the panel, he asked “is [this] the new norm – do we think we're going to have longer lead times generally, or is this temporary?”.

 “I think hopefully it is temporary,” replied David Hogg, sales director, London City Bond (LCB). 

“But we are certainly seeing a number of customers recognising the delays and therefore increasing their stock levels with us in our warehouses, but it just adds to their cost ... they are really mindful of the fact that they need to deliver, they don't like to let their customers down, so they are investing again in starting to build up their stocks in our warehouses, which is good news for us, and hopefully for the trade in general,” he said.

Agreeing that longer lead times are “causing a problem”, Nick Pegna, global sales director, Berry Bros & Rudd, said he too did not anticipate that “that's going to be a permanent problem”.

But, he added: “We are seeing a pushback from customers at the moment in terms of expectations changing, and so we're having to communicate, specifically on the export piece to people without necessarily being able to give them firm answers which is unsatisfactory for everyone involved. So, it is causing a problem. 

“It’s affecting us inwards and it's also affecting us in terms of our exports. We have had an impact on our international businesses in terms of bringing European wines in or groupage as well,” he added. 

Meanwhile, Rachelle Rush, head of supply chain projects, NPD & quality at Treasury Wine Estate, said she believed that “for the short to medium term, we're going to continue to see delays”, adding that TWE was currently experiencing up to seven weeks out of the US. 

“This ultimately impacts the speed of delivery of NPD, and the ability to quickly deliver from inventory hits, but we're building that into our planning to make sure that we're capable of meeting demand, so to David's point we're adapting by changing our stock holding,” she said.  

Other key takeaways from the panel discussion, which was attended by just shy of 150 viewers, were the prospects of additional red tape, tax hikes and potential labelling requirements, which were pinpointed as key clouds looming on the wine industry horizon.