A VAT cut for on/off hybrid drinks retailers, action on retail crime and less red tape should be the priorities for whoever’s in power after the general election on July 4, leading independents have told Drinks Retailing.

Phil Innes, owner of Loki Wine in Birmingham, said Labour’s current huge lead in the opinion polls could help retail sales if it is carried through into a victory.

“I think the likely change of government will change the general mood of the country,” he said.

“As we all know the mood of the general population largely sways retail sales, and this can only have a positive, albeit short-term effect on the industry. 

“Over the longer term, hospitality needs some help with a potential reduction in VAT for on-site consumption.

“This should help level the playing field with retailers, and allow businesses to try to recoup some margin that has been lost due to the significant cost increases over the last couple of years.”

Innes also cited a decluttering of the new duty regime as a priority. A temporary duty easement on wine, introduced in the government’s review of alcohol duty in August 2023, is due to end next February.

The measure allows wines between 11.5% and 14.5% abv to be taxed at an assumed strength of 12.5% abv. When it ends, all wines will be taxed according to their actual alcoholic strength, creating a huge administrative burden for the trade.

Innes said: “The wine industry has been talking about duty simplification ad nauseam, but I still think it is an important point.

“The new proposed system is needlessly increasing red tape which adversely affects small businesses. We should be trying to reduce the amount of red tape for businesses, not increasing it.”

Innes also wants to see action on crime. The British Retail Consortium reported that the cost to retail from shoplifting more than doubled to £1.8 billion between September 20022 and August 2023, with more than 45,000 incidents day.

There were 1,500 incidents of retail violence and abuse each day over the same period, a 50% increase. Six out of 10 respondents to the BRC’s crime survey say police response is poor or very poor.

“We need the new government to take retail crime seriously,” said Innes. “This means putting actual deterrents in place and properly investigating crime.

“We also need to think of how the police can develop face recognition technology in a way that is acceptable to the general public, as this will eventually free up police time, making policing more efficient, and hopefully leading to more time for traditional policing in communities.”

Phil Curl, owner of the Kill the Cat craft beer shops in London, says the combination of higher costs, cautious consumer spending and lower footfall caused by flexible working in city centres has made the retail/hospitality landscape feel like the pandemic without the support given to businesses at that time.

The BRC recorded a 2.7% fall in retail footfall in May 2024 versus May 2023, following a 6.9% drop in April.

“Consumer habits have changed and retail sites are closing at an alarming rate across the country, but the government has done nothing to mitigate this,” Curl said. “Right now, anything would help, but a cut in VAT, reduction in business rates, lower corporation tax or even some kind of grant scheme would be a good start. Or ideally all of the above.”

Helen Dickinson, chief executive of the BRC, said: “A broken business rates system and outdated planning laws are holding back the industry. Politicians of all stripes must address these issues.

“This will boost economic growth, lift consumer spirits and help drive more shoppers back to our high streets and other retail destinations.”

Sunny Hodge, owner of Diogenes the Dog and Aspen & Meursault in London, would like to see a lower VAT burden to encourage consumer spending in hospitality and retail.

“Both hospitality and the alcohol-led sector of the retail market are very product-heavy, labour-intensive operations.

“Unlike other service industries, we are burdened with these costs as well as the increasing price of food and drinks.

“Something needs to budge for this entire sector to make it viable, to retain good talent, and to maintain a good and drink scene in this country. I’d fight for a 15% VAT across hospitality and drink retail.”

Miles Beale, chief executive of the Wine & Spirit Trade Association, outlined the organisation’s priorities for a new government in a speech at the London Wine Fair.

He has now also appealed for a closer working relationship between the drinks industry and government after the election.

“If the last few years have taught us anything, it’s that government engagement with industry is patchy and inconsistent,” he said.

“Some government departments are better at it than others, while some seem actively to disregard the views of business, even where they are essential to delivering change. 

“We hope and expect to work closely with ministers, advisers and officials on the new government’s plans to achieve economic growth, improved environmental outcomes and greater social responsibility.”