Sonya Hook caught up with Miles Beale, chief executive of the Wine & Spirit Trade Association, who recently – and not for the first time – secured the top spot on DR’s Top 100 Most Influential people in the industry. Naturally the conversation focused on the ‘green taxes’ of EPR and DRS, as well as packaging formats and a reminder of some words of wisdom from Mary Portas

On the WSTA website Miles Beale is named The Boss and described as being in charge of “keeping members happy and telling the world why the UK wine and spirits industry is totally ace”.

A dream job, if only the industry didn’t get thrown a new curveball every year. Nevertheless, Beale has been in his role since 2012 and regularly voted the number one most influential figure in the drinks industry, so The Boss he is.

One curveball, of course, is that alcohol retailers are operating in a market which continues to see a decline in volume sales year on year but, says Beale, it’s the general commercial environments that are really challenging.

“Consumer confidence is not great,” he says. “And if you are trying to run a business you are hit with all the things that every other type of business is hit with, and then you get excise duty increases with the additional VAT hit on top of that, and then the green taxes through the Extended Producer Responsibility for packaging (EPR) and Deposit & Return Schemes (DRS).”

The WSTA’s advice to retailers is to be as informed as possible and plan ahead as much as they can, Beale says.

“It’s not rocket science but I think where we [the WSTA] can help is that it is almost impossible to describe how EPR will end up in its final form. I think the scheme will be ready in year three rather than year one, and it’s very likely it’ll be the same story with DRS.”

As an example, Beale points to Wales where the last government announced glass would be in the DRS scheme, only for Plaid Cymru to rule it out in its recent Senedd election manifesto.

“Either way, they have got to do something very, very quickly to be ready for October 2027.

“We are pretty on top of it at the WSTA and – I hope this isn’t over confident – sort of increasingly influential over Defra, because I think they are beginning to understand that we want it to be practicable.

“We are perfectly comfortable with the principle of the scheme but we think they should be designing the best and most efficient scheme possible. The way things are set up at the moment, it is very likely that people and businesses will be moving away from glass in the short term only to return to it in the medium term, because glass is costly under the EPR scheme but more environmentally friendly than other materials, so it will go away and come back, which is all to do with perverse incentives in the EPR scheme initially and then a delay or lack of clarity around DRS as well.

“Our advice to retailers would be to stay in touch with the WSTA and keep on top of it, because it changes quickly.”

The ongoing confusion around these green taxes, alongside other increasing costs for business, could give the bigger, multiple retailers some advantages, especially as their online offerings become more sophisticated. So what can indies do to compete?

To answer this, Beale referred back to last month’s WSTA Summit, in particular comments from the keynote speaker and Queen of Shops Mary Portas. He says: “I loved the way she said, ‘What can’t Amazon do?’

“That’s a useful tip for any retailer to be honest, but particularly smaller and independent ones, which may have more freedom to curate their ranges. It’s not just a drinks thing, but I think the massive advantage we have in our industry is that drinks are really interesting products. So when we ask ‘What is it that Amazon can’t do?’ , it is definitely around the storytelling and the customer experience.

“I also thought Portas had some interesting points about the comparison between independent book shops and indie wine and spirits businesses, because it’s a very similar thing. You might go in for something in particular, but once you’re there you’re in the market to be persuaded, which is where the story of the products comes into play.

“As a retailer you’re likely to sell either products that are higher quality or higher price or both. You have a captive audience once they have entered the doors, so make the most of it.”

Could there be other opportunities for smaller retailers in the months ahead? Yes, but he notes that retailers can’t afford to take advantage of the opportunities unless they have met the challenges, for example of EPR and DRS.

He says: “I think the decisions people are making now are likely to result in success in three years, or not. So it is a case of building your business for the future right now, because the market is tough. Some of the decisions you will have to make are commercial and some might be around reducing staff numbers, or investing in AI, and it’s certainly going to have to include managing the increasing amount of red tape and regulation.

“I think the challenge is making the right decisions early; setting a direction of travel. You may not get everything right but if you get most of it right then you will have a really good chance of taking advantage of an opportunity in maybe three years’ time, when I hope the economy and the commercial environment looks better.”

Beale points to the near future, in which he hopes we will see inflation coming under control and potentially a fall in interest rates.

“If consumers start to feel a bit brighter and want to spend a bit more, are you ready to take advantage of it? I think that’s all part of making tough decisions quickly and effectively now.”

He notes the UK consumer is “pretty robust” and despite the tough times, they are still spending money in our industry. “People do want a little treat and it’s more likely to happen in the off-trade because, even if people are still going out, it’s likely to be a bit less often than before.”

Another trend to keep an eye on, he says, is a growing consumer desire for convenience formats, such as wine in cans or RTDs.

“I think it’s interesting, and it’s more consumer led than anything the government is doing, but we are seeing a bit of innovation. So that’s where I definitely see a bit of an opportunity and certainly a bit of change.”

Making tough decisions now to plan for the future, while also keeping a close eye on changing consumer behaviour – these are just two things that are important to consider as the commercial landscape evolves.
“Good businesses will still manage to make a profit and hopefully they will be in a really good place in the future, when things look brighter, to take advantage of it.”

Preparing for DRS in the UK

The UK deadline is October 2027.

Beale says: “It’s not exactly clear how the deposit and return schemes will work, but the important thing is it isn’t very long away.

“Retailers need to start thinking about what they will offer in terms of giving back the containers.
“They will need to purchase reverse vending machines or think about how they facilitate manual take backs, and managing logos and barcodes and things like that.

“Taking back containers requires some sort of service. It is painful and there will be additional red tape and cost. If we at the WSTA can help then we will, but DRS is definitely coming and we have a small amount of time to plan ahead.”

Beale gave examples of similar schemes where smaller retailers have struggled to find space for reverse vending machines, which led to people travelling miles with bottles in the back of their car,
in order to deposit them; often far from where they bought them.

“This sort of thing is complete madness if it is meant to be a greener solution.

“The UK government can learn something from these case studies, but it’s also thoroughly incumbent upon retailers to be thinking about this stuff.”