I didn’t think it could get any worse……

3 min 56 sec read

….. but it has!

Towards the end of last year (2022) some of our suppliers sent through standard autumn price changes ahead of Christmas, as per usual.At the start of 2023 we received notifications from all suppliers about the pending annual increases due to coincide with the spring budget announcement - again this is quite normal. However, what has not been normal about this year is that suppliers are constantly updating their price increases and deals - some changing as frequently as every month!My policy around price changes at VF has always been - not to change our pricing when we receive supplier notification - only changing our pricing when we receive new stock and new invoices - this means that you, our customers can benefit from our commercially attractive pricing for as long as possible.With so many changes, it’s difficult for me to keep up! We now live in a very different world to the one when I started Vino Fandango in 2019.Let me try and explain some of the challenges our suppliers and importers are facing around pricing:

1) Brexit

I’m afraid, firstly, it started with Brexit. Although this happened in 2020 it’s taken the legislators a while to come up with new rules around a trading agreement. It’s then taken the shippers, agents & importers time to understand the ramifications of new paperwork and processes post Brexit. Bottom line is that it’s now taking more time and resource = increased costs to complete paperwork when importing any goods into the UK resulting in some wineries simply pulling out of the UK market. Shippers and agents simply passed on the increased costs to our suppliers who passed them on to us. I’m still dealing with price increases that are being attributed to Brexit - and I expect this to be an issue for a while yet.

2) Covid

And then we had Covid - which changed the world in so many ways. One of the consequences is that we stopped recycling as much globally as we did pre-Covid which forced up the scarcity, hence price of a lot of wine production consumables - namely cardboard, paper, glass, plastics, metals - all increasing the price of bottles, labels, capsules, boxes etc.

3) The Invasion of Ukraine

And then we had the invasion of Ukraine by Russia and the resulting energy crisis and price increases - and the price of energy affects the price of everything!I have a friend who has been shipping wine from Australia to the UK for 10 years. When he first started it cost €1000 per container - now he’s being quoted €25,000 for the same journey! And some container movements are now being auctioned. No matter how wine is transported around the world - be it by boat, road or rail - they all use energy - which is now much more expensive in this new world that we live in - which I’m sure you’ve all noticed in your own domestic energy bills.

4) Cost of Living Crisis

Sadly, these price increases are now coinciding with a cost of living crisis which has led workers to demand increases wages - which simply drives inflation and prices further.

4) Excise Duty

And now - with increases still working there way through the supply chain to us - we are hit with the government changing the way excise duty is paid on wine from 1st August 2023. Replacing a standing charge for any wines between 5.5 and 15% alcohol by volume, to a graded scale dependent on percentage alcohol content.

In other words - the higher the alcohol level of the wine - the higher duty paid per bottle.

This has been lauded as a ‘health’ policy - but in reality - it’s just a money making exercise by HM treasury which, ironically, I think this will backfire on them in time as the winemakers and industry will simply move towards lower alcohol wines (and thus reducing excise take overall!)

The benefits of this new ‘health’ policy is that sparkling wines prices - which were taxed at a higher rate due to being luxury items - should come down. But a standard 12% bottle of wine will attract an additional 47p tax. The increases on higher percentage wines is even greater.

In my 40 plus years in this trade I have never experienced such difficult times and trading in our industry - but then I look at other sectors - food, construction, property, automotive and I see similar issues - so the above is affecting all businesses and consumers, not only wine retailers.

Summary

Over the coming months, I expect to have to put more price changes in place to cover the product, raw material and shipping cost increases still coming through the supply chain to us - together with the cash grabbing policy from government.

It's not only Vino Fandango that’s affected - it’s all wine retailers - including the supermarkets. So, I’m confident that you will continue to find our pricing market competitive against our competition.My advice is - if you can - buy ahead for that party, celebration or Christmas if you can - because the only way for wine pricing to go is UP!

I hope the explanation above helps you to understand that this small, family business will continue to strive to bring the best value wines to your attention - to service your wine drinking needs! And as always, please feel free to contact me with any specific concerns or queries.

All the best, Cheers,

Alan, Diane, Blair, Philippa.

I didn’t think it could get any worse……

….. but it has!

1) Brexit

2) Covid

3) The Invasion of Ukraine

4) Cost of Living Crisis

4) Excise Duty

Summary

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