FOR YOUR INFORMATION
We share below a number of recent developments. As always, we rely on FIVS Members to apprise us of noteworthy matters. Please contact the FIVS Secretariat with items that may be of interest.
Editor’s Note
Today marks the 70th anniversary of the establishment of FIVS as a global trade federation serving the alcohol beverage industry! With a membership accounting for 75% of the wine trade globally, we are committed to providing a venue and developing tools to encourage sustainable development by our members and the wider industry and to securing a climate free from trade-distorting factors of all kinds.
International Trade
Australia: Majority of 2020 vintage wines exported earlier than usual to China/UK/US, causing lowest inventory levels in a decade – The value of Australian wine exports reportedly fell by nearly 25% during the past 12 months, but as Wine Australia’s Rachel Triggs explains, the majority of 2020 vintage wines were exported earlier than usual – to China in advance of the imposition of China’s import duties in November 2020, to the United Kingdom ahead of the conclusion of the Brexit transition, and to the United Kingdom and the United States due to surges in demand during the pandemic. Although exports to China fell 77% to $274 million, exports increased to the United Kingdom by 7% to $460 million and to Hong Kong by 135% to $207 million, as markets in Denmark, Singapore, South Korea, Taiwan, and Thailand also grew.
United Kingdom: Excise duties on alcohol may be radically overhauled – The Sunday Times has predicted that the UK’s Chancellor will announce a landmark overhaul in the way that alcohol beverages are taxed, noting that Treasury officials regard the system as “outdated, complicated, and full of anomalies.” The Chancellor reportedly may reduce the duty on sparkling wine to the same level as the one for still wine, provide tax advantages to English sparkling wine producers, increase duties on expensive red wines, and introduce special “keg taxes” on barrels delivered to pubs and clubs. Concern has been expressed about the timing of these changes, which could distort consumer purchasing during or after the holiday season.
Minimum pricing
Ukraine: Ministry proposes increases up to 34% in minimum alcohol prices, citing WHO study – Ukraine’s Ministry of Economy has reportedly proposed an increase in the minimum wholesale and retail prices for alcohol beverages, increasing vodka by 8.3 percent; whisk(e)y, rum, and gin by 8.4 percent; cognac by 4.8 percent; and wine products by 8.2 to 34.2 percent. The Ministry expects that the higher minimum prices will increase state and local revenues by UAH 300 million (US$349 million) and reduce the number of deaths from alcohol misuse. The Ministry cited a WHO study claiming that alcohol causes approximately one in five deaths in 30 European countries among people aged 15-19 and approximately one in four deaths among people aged 20-24. In January 2021, Ukraine raised the minimum price for sparkling wines produced in Ukraine from UAH 20 (US$23) to UAH 109 (US$127).
United Kingdom: Minimum pricing had little impact on alcohol-related crime in Scotland – A study conducted by the Manchester Metropolitan University, which analysed police data from Scotland, reportedly found that minimum pricing for alcohol had little impact on drink-related crime after minimum unit pricing was introduced there in May 2018. A professor of criminology from the university concluded that the reduction in off-trade alcohol sales that followed implementation was below that required to deliver a reduction in crime.
Drink drive
Argentina: Legislative committee considering national “Zero Alcohol at the Wheel” legislation – An Argentinian Chamber of Deputies committee is reportedly considering legislation that would prohibit drivers of all vehicle types from driving with any blood alcohol concentration above zero. The bill, known as “Zero Alcohol at the Wheel,” is already in force in several provinces. Current law established a tolerance of up to 500 milligrams (0.5) of alcohol per liter of blood, up to 200 milligrams for motorcycles or mopeds, and zero alcohol for the transport of minors and cargo.
Government regulation
Malaysia: Malaysian Islamic Party encourages strict control of alcohol sector – The Information Chief of the Malaysian Islamic Party (PAS) is reportedly urging the Home Ministry and state governments to regulate and control the Malaysian alcohol beverage sector more strictly. While commenting on a controversy over a new alcohol beverage inadvertently given a shortened version of the name of the Prophet Muhammad’s daughter, he recommended adoption of those regulations used in Kelantan, a rural state in the northeast of Peninsular Malaysia where alcohol is generally prohibited for Muslim consumers.
Illicit alcohol
Russia: Regional government exchanges alcohol for food as methanol deaths exceed 30 – Authorities in central Russia are apparently offering groceries from local supermarkets in exchange for alcohol of “dubious quality.” In the region of Orenburg, approximately 930 miles southeast of Moscow in the southern Urals, 67 people became ill after consuming adulterated alcohol in one week alone, and 34 of them died. The concentration of methanol found in these bodies was three to five times higher than a lethal dose. Police have reportedly seized thousands of bottles from shops and warehouses in the region, and ten people have been arrested in connection with the deaths.
Supply chain
United States: Supply chain issues affecting alcohol sector – Supply chain issues related to the weather, transportation, and logistics are causing critical disruptions for the alcohol beverage sector. Alcohol beverage producers are having trouble properly labelling in compliance with state laws for logistical reasons. For example, a recent Texas freeze has affected the availability of adhesives while the paper required for labels is increasingly stuck in port. Wine producers are also reportedly seeking new supply chains for bottles because containers from China with bottles remain stuck in port or at sea. About 40% of all container cargo in the United States arrives through western ports, and 30% of U.S. exports leave through them. Nearly all containerized goods in northern California move through the Port of Oakland.
NOTE: We make no warranty of any kind regarding the accuracy or completeness of the information in these FIVS Alerts; nor do we necessarily support or agree with views expressed or contained therein.