Holter on the loose

30 November, 2007

Let's stick together as duty hikes become more likely

Nobody I've spoken to in the past couple of weeks is shrugging off the suggestion of a major duty hike on alcohol. Pressure on the government is reaching critical mass, and campaigning groups are likely to redouble their efforts if the Treasury misses the opportunity to beat up the drinks trade

in next year's Budget.

It's more important than ever that the industry sticks together on this issue. There is no point in the on-trade sniping at the offs, or the wine trade pretending it isn't really involved. We're all in this together and if duty does increase, it will hit everyone.

At last week's Responsible Drinks Retailing conference, it was encouraging to detect a change of tone from the main protagonists.

Mark Hastings, of the British Beer & Pub Association, discussing the nation's drinking habits, declared that

problem drinking could not be solved with duty or, indeed, pricing. It was not quite in the same league as Gorbachev signing the missile treaty with Reagan in 1987, but for anyone who knows the recent history of the drinks trade it was a memorable moment. Might this be an acceptance that attacks on off-trade pricing are futile and a diversion from bigger issues? Time will tell.

Yet if a huge duty rise is on the way, not everyone will be despondent. There are those who feel that the trade has got trapped behind certain price points for too long and retail prices do not reflect production costs. By forcing the dam to burst, they argue, consumers will be faced with a more realistic pricing structure, and it will be easier in future to pass on modest but regular increases.

Settle in for a big freeze Ice. It's not sophisticated, it doesn't taste of anything and it requires bulky, expensive equipment to keep it in saleable condition. But what a seller - if your customers know it's available. Talking to a large retailer the other day, I was surprised to learn that the margin offered by frozen water is 50 per cent. And stores which advertise its availability - very sensible over the festive period, when houses are cramped and over-heated and refreshment is as important as it is in the summer months - do sell a lot of ice. Apparently, the public is putting it in cider and even wine these days ... Just as people don't tend to notice what they pay for ice, and make other purchases while they're buying it, premium ice cream is another item worth considering, even if you're not delving into convenience territory with your range. Think what it could do for your Pedro Ximenez sales.

Worthy winners

Congratulations to our winners in this year's Responsible Drinks Retailing Awards. The standard just keeps rising and most entrants this year would have been worthy of winning in previous years. You can read more about this year's victors in the Dec 7 issue of OLN.

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