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"No one wins. I don't see any company coming out of this up" - just-drinks speaks to Wine & Spirit Trade Association chief executive Miles Beale - CORONAVIRUS SPECIAL

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As the coronavirus COVID-19 throws the UK into confusion this week, just-drinks speaks to the chief executive of the country's Wine & Spirit Trade Association, Miles Beale, to hear his view on a tumultuous few days - with no immediate end in sight.

The coronavirus COVID-19 has added to The Wine & Spirit Trade Associations Brexit-heavy in-tray

The coronavirus COVID-19 has added to The Wine & Spirit Trade Association's Brexit-heavy in-tray

just-drinks: What advice are you giving your members about the current situation?

WSTA chief executive Miles Beale: Only last week, we had the UK Budget. Generally, it was a good budget for us. Suddenly, the world has completely changed. We're mainly having conversations with our members about the situation they find themselves in.

Brexit thrust us right into the spotlight - we have members who export and members who import, so we understand both. With this, it's much less straightforward for us to deal with because we also have members who are hospitality businesses as well as suppliers to those hospitality businesses. They're on the front line not only of the coronavirus, but also the fear of coronavirus. You have to start preparing for what you think is coming. When we've got politicians saying don't go out to restaurants, bars or pubs, demand disappears literally overnight. That's certainly what's happened for a lot of our members.

"You wouldn't expect multiple retailers to be smashing all sales records with sales of hand sanitiser and loo roll"

At the other end of the spectrum, we have the multiple retailers, who are inundated, but in a way that's slightly odd. You wouldn't necessarily expect them to be smashing all sales records with sales of hand sanitiser and loo roll. So, they're not able to fulfil the demand for the products of our great industry. They're not delivering wine, because they have to prioritise loo roll and sanitiser.

So, we've had a full spectrum of responses from our members, because it depends what kind of business they have.

Two things are common: One is that, even if currently they aren't feeling things quite as painfully as an on-trade business or an on-trade supplier, they are absolutely sure that it's coming. Even if they might have a temporary benefit from stockpiling, this isn't actually an increase in demand, it's people preparing for being stuck in their houses for a number of months. The other thing - and it's one of the few things I can hold on to, to be optimistic - is a sense of community, whether it's the drinks industry community or the local community.

I imagine this is what it felt like during the war; people pulling together and trying to help each other out, which is quite nice. But, it's hard to look past the economic consequences for anyone working in the drinks industry.

j-d: What advice are you able to give to your brand-owner members?

MB: It depends who they are. If they're a multinational brand owner, then some of this is not immediately new. They might have seen some of this already in the countries that are two or three weeks ahead of the UK. They'll have some idea of what's coming and they'll have some idea how they intend to respond.

Earlier this week, we put out a direct call for the government to stop collecting duty for a six-month period. Most of our lobbying effort has been indirect - I've been working with the Food & Drink Federation and  UKhospitality, who are absolutely at the sharp end. The WSTA and UKHospitality have had an arrangement on Brexit, where we do goods and they do people. This is definitely up their street, so we're rolling in behind them.

What we called for yesterday is specific to us, because it's deeper. What we need to address is the cashflow problem because, for small businesses, particularly for those in the on-trade, a loan, even a grant, is only going to be so helpful because they've got to apply for it, and they have to have a business plan. Now, writing a business plan in the current environment is rather difficult to do. The advantage of not collecting duty for six months is they suddenly have cash in the business that they wouldn't otherwise have had - it's immediate help. If the Government doesn't do this, some businesses won't survive, and they won't be collecting duty anyway. A lot of duty payments are due to go out on the 25th. We have a week to persuade the Government not to collect.

When it comes to giving advice, we consider ourselves a conduit of information, with the exception of our ask around duty.

j-d: What sort of relationship do you currently have with central government? Are you getting the attention that you feel you require, under the circumstances?

MB: It often isn't us directly because they're worried about particular industries, like airlines, transport and hospitality. Kate Nichols, the CEO of UKHospitality is having most of those discussions, which I think is quite right. What I'm trying to do is offer her as much support as I possibly can. If her members are healthy, then some of our members who are suppliers to her members will also be healthy, although I think healthy is aiming quite high at the moment. We have had conversations with officials directly, but this is all very new. It's just pretty extraordinary. No one has a working memory of anything even vaguely similar.

j-d: How do you square the recommendation from the Prime Minister that consumers avoid on-premise outlets rather than instructing the outlets themselves to close?

MB: It's extremely tough on a lot of hospitality businesses. It's advice without being a requirement. From the Government's point of view, I understand that they don't want everything to shut down immediately and they don't want to cause any panic.

The difference between the Government's advice and simply shutting everything down, it seems to me, it's like the response has graduated. If London is about to go into lockdown, what does that actually mean? It's not clear to me whether they will require everything to close at some point in the future or not. They can't expect supermarkets to shut, and the Prime Minister is still saying he is not requiring pubs to be shut.

But, if you're advising people not to go to them, it does send a pretty strong signal already.

j-d: Of your members, who do you see as winning out of all this?

MB: I think no one wins. I literally mean no one wins, because I don't see any company coming out of this up. If there's stockpiling going on, then those consumers that are stockpiling today aren't going to carry on stockpiling for however many weeks or months we may be locked down, or at home, or in isolation.

There are clearly some businesses that are better-developed than others in some areas, Any company that is able to offer direct-to-consumer sales is definitely going to be in demand. When we, God willing, come out of the other side of coronavirus, these companies are probably going to be in a good place to keep some customers that they probably gained in the short term. Business models are adapting and some will survive better.

just-drinks spoke to WSTA chief executive Miles Beale earlier this
month

just-drinks spoke to WSTA chief executive Miles Beale earlier this month

j-d: Do you see any longer-term effects? Is a new normal being drawn up, or can we genuinely get back to normal?

MB: I don't think there is a new normal. I don't think there will be a new normal for quite some time. Challenges like Brexit were requiring some change anyway, but this is a whole different ball of wax.

I have no idea what a new business environment will look like. It will almost certainly be different, but I can't imagine the on-trade will look the same on the other side of coronavirus as it did before. But, I can't tell you exactly what that will look like.

I can see businesses wanting to be more resilient - more of them will be more omni-channel than they are now. It's quite possible there will be fewer businesses around, full stop.

Hopefully, if the support is right, then people can survive for a period of time. It's just a question of how quickly we can get back to the same level of demand as before coronavirus. If we're talking about a return to something like normality in July, that's one thing. If it's not until September, that's something else, and if it goes into the winter and coronavirus either stays or reappears, then I think it's extremely different once again.

That sounds like a bad answer, I'm afraid, but there are just so many unknowns. There'll be change, it's just a question of whether there's a bit or an enormous amount. The scale of change is the thing that we've really got to watch out for.

j-d: We always had the sense that the WSTA was running at capacity in its dealings with Brexit. Are you now about to collapse under the weight of all this?

MB: I very much hope not. I have an extremely good team at the WSTA. They're very good at being agile. The trouble is, lots of this is unknown. It's not like there's guidance for any of this.

If there's anything I'm worried about, it's people. All of my team are working from home, which is a strangely stressful environment. I am not finding working from home relaxing, trying to juggle lots of things and be useful in a time of uncertainty and crisis. So, it's the human cost that I'm watching out for, and I hope everyone keeps mentally and physically well.

I'd prefer to be having this conversation across a table with a glass of wine, rather than over the phone, looking out of the window at people wandering around in face masks.


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