“We really want to shout about the potential of the fortified category more, rather than always driving for lower prices and promotional activity,” says Mentzendorff’s managing director, Justin Liddle, at the company’s portfolio tasting in London. 

After joining wine importer Mentzendorff in 1998, Liddle was appointed managing director last November, following a seven month stint as interim managing director. 

In an eventful and arguably challenging period for the trade, Liddle’s first year as managing director saw excise duty on alcohol increase in August 2023, while a taxation system based on alcoholic strength was also put in place. 

The fortified category has been hit particularly hard by the new duty system, with the Wine & Spirit Trade Association previously suggesting that most fortified wines will see a price rise of around £1.50 per bottle.

Liddle estimates that fortified makes up about 30% of Mentzendorff’s portfolio in terms of volume, and duty changes will undoubtedly have a considerable impact on many of the importer’s brands.

However, he remains optimistic for the future of fortified wine, and port in particular. Speaking to Drinks Retailing, Liddle says: “Port is at an interesting crossroad at the moment. Port prices have been fairly consistent for quite a long time. But duty changes have been a catalyst for price rises and the market has had to look at itself and do some re-engineering.”

He also highlights that price rises are not just driven by duty hikes: “Quite rightly so, the Portuguese government has raised the minimum wage. It’s important that workers are paid fairly, and ultimately that means that port has to increase its price.”

And as the market re-evaluates both its prices and its growth strategy, Liddle thinks that this could present an opportunity to breathe new life into the category. 

“Whenever we do tastings and events, consumers love port. But the category hasn’t invested in showing port’s versatility to as many people as possible.

“It’s such a broad category and there’s so many things that you can do with port,” he adds, mentioning Fladgate’s new white port and tonic RTDs. “We really want to talk about the diversity of the category more, instead of just focusing on low prices.”

He also mentions premium port as a promising area in the fortified space. “Growth is all in the premium lines. We are seeing that much discussed trend of people drinking a bit less but wanting more from each bottle that they get. They’re willing to spend a bit more on quality products with real authenticity behind it.

“And with regards to duty changes, if you take a longer term view, it’ll be the more premium lines that are least affected compared to those with lower retail prices as it’ll lift up the minimum price point.”

But this is not to say that Liddle isn’t hopeful for a duty freeze in the upcoming Spring Budget. “Certainly none of us supported the change in the duty regime, and it was undoubtedly a major shock to the fortified category.”

He continues: “It’s alarming to think about the additional complexity another duty rise could bring. The whole economy is in a relatively fragile state and we certainly don’t want any further disruption from a duty increase.

“Retaining the current duty rates could hopefully give the trade a much-needed period of stability and an economical boost. This, in turn, should bring a bit more confidence back to the market.”

LOOKING AHEAD

Despite the challenges that the trade has faced in recent years, Liddle praises the resilience of the industry, and in particular, independent retailers.

“I’m hugely pleased that independent specialist retailers are as still as confident and as positive as they are,” he says. “I think off the back of Covid we’ve seen a real renewed sense of optimism and confidence within those independent retailers. And, it’s great to see that even with the economic conditions, consumer interest is still high and retailers are still opening new stores.”

And with hopes that the independent sector will continue to flourish, Liddle is looking at expanding Mentzendorff’s portfolio this year: “We’re certainly keen to develop our portfolio.

“We’ve been a lot more active in terms of talking to potential agencies and investing time in starting new relationships with producers.” 

As part of his role as managing director, he is also looking to gain a better understanding of Mentzendorff’s reputation among its customers and the broader industry.

“It’s very important to me to gain a better understanding of what our customers think of us so that we can provide the best service,” he explains. “We also want to understand how we’re perceived in the market.”

“We’ve got a great team of people, and above all we’ve really got a desire to be the best possible company that we can be.”