December is the month to reflect on the out-going year and make a few predictions. The Federation of Wholesale Distributors will look back on 2006 as the year the Competition Commission inquiry into the UK grocery market began.
I confidently predict that 2007 will see its conclusion, but will the inquiry bring about any of the changes to the structure and governance of our marketplace that are so sorely needed?
The FWD, its individual members and like-minded bodies have put a huge effort into feeding the CC’s enormous appetite for information. If this counts for anything, some good should come out of the inquiry. But, let’s not all hold our breath. We await the imminent publication of the CC’s “emerging thinking” and the signs are not altogether good. Few manufacturers, it seems, have complained about the treatment they receive from the major supermarkets. No change there then, as the discredited and unused Supermarkets Code has already highlighted. Even so, we will continue the on-going battle through next year with many staunch allies such as the ACS, the NFRN, the SGF and NIIRTA.
The other issue that has dogged us this year has been the continuing high levels of duty fraud that have been affecting the legitimate wholesale trade in alcohol – particularly beer and wine sales. Our share of the beer market in particular vies with that of the multiple supermarkets, and is a revenue source that we simply cannot afford to lose.
Such was our alarm at the current state of affairs that last month FWD commissioned a specialist consultancy to review UK and EC law in order to recommend a series of actions to the Government that could be put into immediate effect to combat the fraud. FWD has now delivered a comprehensive set of proposals that it is currently discussing with HMRC and Treasury officials. I forecast that next year will see the implementation of some of these.
A big sigh of relief was heard all round when another threat to wholesalers’ alcohol and tobacco sales was removed recently. The European Court of Justice ruled against allowing consumers to buy drinks and cigarettes online at lower duties from other countries. Some believe this may be a short-term reprieve because planned draft legislation could reverse this decision. However, because unanimity between all the member states would be required, realists say our Chancellor and several others would block it on the basis that turkeys don’t vote for Christmas. And on that prophetic note, I wish you a most happy Christmas and a prosperous New Year.