Wine Society to absorb duty and inflation increases

Drinks Chat
#1

New video from CEO Steve Finlan is up on Twitter and Instagram - https://twitter.com/TheWineSociety/status/1644633762829926402.

Here’s what he says for those that are unable (or don’t want) to listen to the audio:

‘Rampant inflation and the cost of living crisis has led to increased prices everywhere. To make matters worse, the Chancellor has just announced in the recent budget the biggest tax rise on wine in the last 50 years - that’s 54 pence per bottle. At The Wine Society, we believe in outstanding value. Last year for example, we took away delivery charges and last year we held the majority of our prices. And we plan to do the same this year. That means that we will pay for inflation and we will pay the 54 pence wine duty increase. As a mutual, this feels like just the right thing to do but we are going to need your help. Just three bottles more between now and October will enable us to hold prices until the end of the year. Six bottles more, we can start to reduce prices. I genuinely believe that, working together as co-owners of our business, we can turn the tide on rising prices.’

I think this is an excellent move. Can’t imagine many other retailers will be in this position. And certainly not against buying a few more bottles to make it happen!

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Current Wine Offers (Anywhere)
#2

I’ve played my part and bought 6 more bottles!

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#3

Yep me too, I’ve stepped up to the plate now I know it’s 100% for charity. Do I get tax relief on that ?

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#4

I’m delighted at the price restraint and hope it will continue. I am slightly uncomfortable with some of the language, though I suppose it depends how you read it. “We” will pay the extra duty, etc. The “we” is in fact us. The Society’s revenue comes from us and its expenses are paid with money which has come from us. It’s not as if some benign entity is providing the money on our behalf.

It’s the same thing that always irritates me when government representatives say “we” will pay for x, y, or z. It’s our money, from our taxes, not theirs. It may be their job to distribute it suitably, but it is not their money. (Though there does certainly seem to be a lot of confusion in the current government).

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#5

I’m not sure it’s quite the same as this is, presumably, a commitment to lower margins rather than redistribution of income we are paying in.

#6

Lower margins/bottle but more bottles sold so preserving the total margin on sales. Possibly works where the volumes are large and WS sales are not a market-changing share of a producer’s total sales. But if we all try to take our extra 3 or 6 bottles from small producers/scarce EP offers, etc., that is going to do something drastic to what the WS needs to pay to the producers.

A good and conventional marketing gesture (‘we will pay the increased VAT’ is a normal offer), rather than a clear cost calculation for us to analyse. If sales don’t increase (the target and the base are of course unclear: all members? all active members? all prices?), it seems unlikely that there will be an announcement later in the year that we haven’t bought enough, they have recalculated, and prices are going up.

#7

I imagine that most forumites will do their bit :grinning:

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#8

If everyone here buys 3 bottles per day they will make wine free

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#9

Can someone supply the following info?
What percentage of members buy bottles?
What’s the average number bought annually?
What’s the highest number? 365 per year ?
Apologies if this is in the annual report somewhere!

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#10

Point of order here, but I think you’ll find under the current regime plenty of your money is indeed now their (and their mates) money :smiley:

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#11

Totally on board and indeed impressed, assuming @SteveF means three more bottles at the expense of the supermarket or other large (often misleadingly ‘discounting’) supplier, rather than encouraging members to cut off their local high street indie, or just drink more. Might be worth being crystal clear about that - neither would be a good look - but can’t imagine that’s what meant.

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#12

Done. I’d been eyeing up some Aus/Tas Chardonnays and a few other things, so I’m very much looking forward to trying my extra 6.

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#13

Can’t see this information published directly, but using the assumption that an “active member” is someone who’s made a purchase in the last year (might be wrong, but this is how I’ve previously defined an active customer in businesses that I’ve been in):

Approx 170,000 active members
13 million bottles sold in 2021/22 financial year (last available public info)

So just over 76 bottles per year per active member.

An additional 3 bottles per active member in the next 6 months would represent an approx 8% average increase in bottles purchased by active members compared to 2021. There is plenty of evidence in other threads of price increases since 2021, so that 8% volume increase represents a higher cash spend % increase.

This is not to criticise the honest attempt by TWS to mitigate further inflation impact and absorb the duty increase, merely to try and provide some context as to what they are asking of members. Figures rely on an assumption and sales figures from 2021, but hopefully not too far out.

This forum might participate heavily, but I would guess that regularly contributing members on this forum represent under 0.5% of active TWS members, and even if you included lurkers, it would likely be no more than 3-4%.

Of course, the Twitter and Instagram posts will likely reach a larger audience, but any of us posting here about buying more, while of course positive, isn’t particularly indicative of wider member response. Using the annual review figures, the average bottle price sold by TWS in 2021/22 was around £12, and my entirely unscientific observation is that the average bottle price posted by forum contributors is, unsurprisingly to me, a fair bit higher.

Will volumes increase by 8% more than they would have anyway? Perhaps a bit of a stretch, but if other retailers increase prices and TWS doesn’t, maybe there’s a chance. The supermarkets will do all in their power to keep prices lower too, so hard to know what will happen.

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#14

Presumably EP purchases that arrive will still have the new duty rates applied if they are delivered from bond. EP not looking as good now.

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#15

When I was doing the press tasting a few weeks ago, I had a long chat with Steve and he did mention that they’re trying to get as much of the EP delivered before the rates go up as possible for exactly this reason.

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#16

All EP purchases whether new, awaiting import or held in bonded reserves for however long, will attract the duty and VAT rates in force at the time they are withdrawn from bond.

However, comparable wines being sold duty paid will also reflect those same rates so EP should look as beneficial as now…

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#17

I’m normally a staunch supporter of TWS but I do take exception to the comment “… last year we held the majority of our prices.” When I personally have seen so many vintages of wines I have already bought reappear labelled as “New Vintage” when they are exactly the same as the one I bought but now more expensive. I can only say this anecdotally as I have made no record of it but I have noticed it time and time again over the last 12-18 months.

It hasn’t worried me particularly as I figured we are all suffering from inflation but I’m afraid it does not match with that statement as far as I can see.

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#18

I share the same views

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#19

I’m on a wine buying ban right now, so if someone can buy some on my behalf, that would be great

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#20

I covered at least 20 members :smile:

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