GORI WINE & SPIRITS LOGISTICS NEWS AND INSIGHTS
Welcome to the third edition of Gori Wine & Spirits Logistics Newsletter! In this edition you will find the latest news from the Gori world and shipping industry.
Gori Wine & Spirits Logistics Team
Updates from Gori Office
Gori is an official partner of the important event called “Welcome Brunello” 2019 which will be held in Montalcino (Siena) from 15 February to 18 February. Every year the “Consorzio del Vino Brunello di Montalcino” awards a prize called Leccio d’Oro. The prize is divided into three sections: restaurants, wine shops/bars and bistros.
Prizes are awarded by a jury composed of Italian and foreign wine and food experts and are judged on various criteria such as places with a wine list with a wide range of Brunello di Montalcino wines, presentation of the wines and service etc. by a jury composed by Italian and foreign wine and food experts.
Gori’s presence is crucial as it shows its constant support to the wineries. Gori is always close to the trade, understanding the challenges that the wineries may face and propose alternative suggestions. We believe Gori has a unique relationship with the customers revealing it to be the key of its success.
Wine & Spirits Market Updates
According to a report published by Allied Market Research, the luxury wines and spirits market is expected to reach $ 1,122,578 million by 2022 supported by a CAGR of 4.8%.
The rise of the market is due to the overall tendency to pay more and more attention to the quality of the products. This involves drinking less but better, preferring higher quality and contributing to the fall of low-priced spirits.
For example, if we take a look at the United States Wine and Spirits market, it seems there has been a steady decline in consumption of alcohol in the past year. Yet, people have not stopped drinking, they have simply chosen quality over quantity. This could also be linked with increased concern with health and fitness.
Consumers are driven to purchasing fine quality products instead of cheap products and the market is based on the consumers’ satisfaction. Furthermore, these products are mainly requested in parties, events, social gatherings and these occasions give great opportunities to manufacturers. Let’s take a closer look at the products in order to analyze the trend during the forecast period.
Wine is expected to be the major contributor for the wine and spirits market with the European region maintaining the lead position during the next five years in terms of volume and value (+37,8 million cases against spirits + 36,5 million cases). Apart from European countries such as France, Italy and Germany which continue playing a major role in the market, the United States, especially North America, is still another large wine consuming country across the globe.
Spirits. The trend of spirits is generally complex. According to IWSR forecast, there will be a global increase of whisky followed by gin and liquors based on agave, while the demand of vodka will be in decline following the consistent decrease of demand from the Russian market. The tendency is that low-cost spirits will lose market for the reasons above mentioned, along with the consumption of rum and brandy.
Beer, forecasts are a bit contradictory. While it is agreed on the fact that the global market of beer re-flourished in 2018 after a very stagnating 2017, unfortunately its growth does not seem to be long-lasting. According to IWSR, beer will progressively lose importance in terms of volumes by 2022. China, United States and Russia, where the domestic consumption has been in decline for the past years will contribute to the low volumes of beer. United States in particular will play a major role in the growth of wine and spirits, while Vietnam, Mexico and Brazil will help the beer market to grow. However, Beveragedaily is more optimistic about the growth of craft beer in the United States, highlighting that more breweries are expected to open across the country in 5 years’ time. Indeed, the consumption of craft beer has grown on the Eastern coast since 2015 mainly due to changing laws.
With effect from 1 February 2019 the position of EU exporters and investor will considerably improve within the Japanese market. The EU - Japan Economic Partnership Agreement that was completed and finalized last December 2018 will create new opportunities and investments, along with the promotion of a closer economic relationship between the parties.
Japan is the world’s third largest economy besides the EU in terms of Gross Domestic Product, and plays a major role for the European Union exporters.
The free trade agreement is about the elimination of customs duties. As you may expect, this is a crucial achievement for the logistics world as the agreement with Japan will remove any trade barriers. The EU wine exports to Japan are worth around € 1 billion and is the EU’s second biggest agricultural export to Japan in terms of value. From 1 February, the 15% tariff on wine and other alcoholic drinks will be cancelled.
Latest Industry News
Brexit. Is the Logistics World Going to Be (Hardly) Affected?
When the idea of Brexit initially emerged, freight forwarder businesses obviously started to draw their considerations about the possible benefits or disadvantages from a UK exit of the EU. Before the 23 June 2016, anyone could make a comment, probably thinking (or hoping) that Brexit would never happen. Cargocare for example brought the attention to the fact that before the EU, the movement of goods between Ireland and the UK being subject to customs clearance lead to significant revenues in handling those logistics for customers.
Other commentators depicted a different scenario which could have come out from the Brexit. According to Wolfgang Lehmacher, head of the Supply Chain and Transport division of the World Economic Forum in fact, Brexit could only have a negative impact on transport costs and logistics. The first thing to remark according to him, is that the UK is the largest export market for other EU countries. So, whether the UK decided to harmonize with the EU (and the EU agreed on it) or not, there would be new regulations and distribution processes which could become hostile to trade with the consequence of cost increases and causing delays in transports. In brief, Lehmacher cannot see any economic benefit for the British economy and the freight forwarding world.
If these were only suppositions, what is the situation like now that Brexit is not an imaginary topic anymore? Now that Brexit is at the door, where does the UK and all the logistic world stand?
It is all so real and still so uncertain. The UK will definitely leave the EU 29 March 2019, but up to today the situation is chaotic. So far, all the chances to have a deal between the UK and the EU are floating.
The message that is passing these days is that it will be a hard Brexit, as the UK parliament has lately rejected the Brexit plan put forward by the Prime Minister Theresa May. In the light of the dramatic failure of the plan, Robert Keen, BIFA (British International Freight Association) Director General urges not to waste time and recommends that all the members of BIFA should be prepared on the basis that it will be a hard Brexit. If a deal is not reached, the impact on the logistic world will be catastrophic. Not only the UK will lose the free trade access to the EU, rates will increase and surcharges will be applied to many products, but any European goods entering or leaving the UK will be inspected and this will consequently cause delays.
The British ports and the ones along the Northern Coasts will be congested. It will definitively lead to the destruction of supply chains. Shipping Watch reports an interesting article written by Simon Valeur which stresses how the majority of British ports are not ready for Brexit to happen as their executives lack planning or practical solutions. Only a small percentage declared to feel confident to handle the Brexit effects.
For this reason, the logistics industry is urging the British government to avoid a no-deal Brexit, in order to continue free trades, avoid rate increases and costs for logistic businesses.
In conclusion, the word Brexit which has become the synonym of “disaster” is threatening the logistic world. In the meantime it can only be reported Robert Keen’s appeal that the “responsible bodies” prevent a no-deal outcome and BIFA members “will get you politicians out of this Brexit mess”.
So, what can WE do for you?
We understood that whether it is a hard or soft Brexit, the relationship between the EU and UK will change, and will reflect on your activity. We are determined to maintain our services at the highest standard levels no matter what the outcome is.
We are indeed improving the infrastructures, planning to increase the space in our customs warehouses both in the UK and EU, ensure extra support and training to the customs’ team, deepen the knowledge of licenses for freight service. Most of all we are working on reducing at the minimum any possible disruption.
We will always be ready to assist you in your import/export procedures. You can contact us any time, we will be pleased to help you.
Meet Gori at ProWein in Düsseldorf
We are pleased to announce that Gori will renew its presence at ProWein, the leading trade fair for wine and spirits, in Düsseldorf on 17 – 19 March at: Hall 14, Place 14D02
Our staff will be delighted to meet you at our booth! If you are around, you cannot miss us!