Majestic Wine boss Steve Lewis says supermarkets are likely to increase the price of a £5 bottle by 50p or £1 next spring
Wine lovers are facing a worse than usual new year hangover as poor harvests in some of the world’s most important wine producing regions threaten price hikes of up to £1 a bottle in 2013.
Majestic Wine boss Steve Lewis said the increases would be most noticeable in the supermarket where British favourites such as Italian pinot grigio, New Zealand sauvignon blanc and Australian chardonnay sell for around £5 per bottle.
“I would expect to see significant price inflation at entry price points,” he said. “The price of a (£5) bottle of pinot grigio could go up by between 50p and £1 come February/March.”
A poor grape harvest in 2012 is predicted to lead to a worldwide wine shortage with the International Organisation of Vine and Wine (OIV) estimating last month that global production would fall 6% to 248.2m hectolitres – the lowest level since at least 1975 – after extreme weather disrupted harvests around the world. The hardest hit winemakers are in Argentina, where output will fall by nearly a quarter, and in Italy and France which are the world’s largest producers.
The power of the supermarkets, which account for three-quarters of UK wine sales, means the average bottle of wine sold in Britain costs £5.01. But Majestic’s competitive strength lies in the fact its average selling price is £7.46, making it an important sales channel for producers with more expensive wines to sell.
“If you are the producer of an esoteric, interesting, quirky wine like Gavi di Gavi or Orvieto, and you have a lot of it, we are your go-to retailer,” said Lewis.
Lewis’s comments came as Majestic reported a 4% rise in profits to £9.2m for the six months to the end of September as a surge in online orders helped counteract disappointing summer trade. Like-for-likes rose by just 0.6% as wet weather saw a large number of outdoor events cancelled and cases of wine ordered by enthusiastic organisers returned to its stores. “I measure summers by how many barbecues there are in the Lewis household and we had one in April and one in September,” said Lewis. “It rained and rained so customers never got into the habit of sitting in the garden sipping wine.”
Current trading has been more encouraging with UK like-for-likes up 1.2% in the last six weeks and Lewis said it was “optimistic” as it entered the important Christmas trading period.
Three years ago Majestic lowered the minimum purchase from 12 bottles to six to encourage customers to shop with them more frequently and the retailer said the ploy had worked with the number of customers in its database who had purchased in the last 12 months up more than 11% to 594,000. That offer has now been extended to its website, fuelling a 14% rise in internet sales to £12.7m. Group sales were down by £1.8m at £126m after it retreated from the wholesale drinks market where the profit margins are lower.
“We think the decision to reduce the minimum purchase requirement from 12 bottles to 6 was genius,” said Panmure Gordon analyst Philip Dorgan. “At a time when the UK consumer is both watching their pennies and prepared to spend on quality product, this move significantly increases Majestic’s target market.”
Chinese telecoms firm classified as cyber-security risk by US and Australia promises to ‘dispel myths and misinformation’
The Chinese telecoms equipment firm Huawei, classified by several governments as a national security risk, has done a poor job of communicating about itself and in trying to dispel myths, the chairman of its Australian business has admitted.
A US Congressional committee has urged firms to stop doing business with Huawei based on security concerns, while Australia blocked the company from tendering for contracts in its A$38bn high-speed broadband network.
“We sincerely hope that in Australia we do not allow sober debate on cyber-security to become distorted the way it has in the US,” the Huawei Australia chairman, John Lord, said in a speech in Canberra, adding that the company proposed to set up a cyber-security evaluation centre in Australia. The centre would give complete access to its software source code and equipment.
A similar centre was set up two years ago in Britain, where Huawei is involved in the rollout of broadband with the co-operation of the government. Security-cleared staff test Huawei’s hardware and software at the UK centre to ensure it can withstand any cyber-security threats.
Huawei has proposed similar measures in the US.
“Huawei has done a very poor job of communicating about ourselves and we must take full responsibility for that. Huawei has a duty to set the record straight, to dispel the myths and the misinformation,” Lord said
Australia and the US cited security concerns for their actions against Huawei this year, prompting Canada and Britain to look into similar issues.
Huawei, the world’s second-largest maker of networking equipment, launched its Australian operation in 2004 and has expanded its business across Australia, New Zealand and the South Pacific. It has become a significant market force in the region, supplying equipment to Optus and Vodafone and conducting trials with Telstra, the biggest carrier in Australia.
Huawei Marine Networks, a joint-venture between Huawei and Britain’s Global Marine Systems, is involved in building telecommunications submarine cables from Australia to New Zealand and Singapore.
Huawei’s local board in Australia also includes the former foreign minister Alexander Downer and former premier of Victoria state John Brumby.
Brewers at festival to raise profile of UK hops say traditional crop and techniques could be usurped by trend for stronger imports
It is the quintessential English crop, synonymous with the Kent countryside and a key ingredient used to give beer its flavour. But there are fears that traditional British hop farming could die out within a decade, as brewers turn to imports from the Czech Republic, US and even New Zealand to add varied and unusual flavours to their beers.
Kent’s ubiquitous oasthouses – many now converted into luxury homes – sprang up in the 19th century to facilitate the drying of climbing hop plants’ female flowers. Hops, used as a flavouring and preservative, became a vital ingredient as beer took over from ale as Britain’s most popular tipple.
For the past 10 days breweries have been taking part in a new beer festival in the hope of raising the profile of British hops and reinvigorating the industry. More than 20 brewers have dispensed with their usual dried hop recipes at the Kent green hop beer fortnight. They have instead been using only fresh, locally grown “green” hops, which go into the beer less than 12 hours after being picked. Green hops are said to give beer a light and fresh flavour because they retain oils usually lost in the traditional drying process. The beers can only be made once a year, at the end of summer, and brewers say they are unique because it is impossible to make the same beer twice.
Barack Obama uses fresh hops in his own beers, brewed at the White House, the recipes for which were published earlier this month. According to the Campaign for Real Ale there are 840 breweries in the UK – more than at any time since the second world war. But an increasing number are turning to hops from overseas. Varieties from the US, New Zealand and eastern Europe are favoured by many microbreweries for the stronger flavours they can produce, and hop farmers and merchants fear it could mean the end of the industry in the UK.
Paul Corbett, managing director of hop merchant Charles Faram and Co, said: “Some growers have been idling crops this year because there haven’t been enough sales and if they can’t sell the hops they pull them out. Our fear is that if demand falls any further then the infrastructure not just for growing, but for picking and processing hops will disappear. If we don’t stick up for the UK hop industry now, there will be no industry in a decade’s time.”
At the industry’s peak in 1872, British hop farmers grew around 72,000 acres of the perennial climbing plant, but demand has decreased to the point that last year only 2,500 acres were grown. The only major hop-growing regions now are Hereford and Worcester and Kent. Despite this, the UK is at the forefront of efforts to develop new varieties – including dwarf or hedgerow plants thought to be more sustainable than higher climbing hops – and the revival of old ones. The hedgerow hops cost less to grow, can be picked by machine, are more resistant to disease and require lower chemical inputs.
Eddie Gadd, head brewer of Ramsgate brewery in Kent, said: “Many people don’t realise what an incredible range of flavours and aromas brewers can create by using different varieties of British hops in different ways.
“We hope Kent green hop beer fortnight will flag this up to a few more people and in turn raise the issue of what’s going on with the UK hop industry and that if we don’t use it we’ll lose it.”
Richard Frost, head brewer at Shepherd Neame, also in Kent, said: “Following the sharp decline of recent decades, we are now at a plateau in terms of acreage. We should be careful not to let the use of foreign hops become a marketing gimmick.
“If British growers can provide what is required in the UK market by developing new varieties, then I can see little reason to import hops. However, I recognise that foreign climates can make a huge difference to the characteristics of certain hops.
“All brewers can do is keep a strong relationship with hop growers and continue to champion great British beer, using British – or in our case Kentish – hops. We are hugely committed to Kentish hops for a variety of reasons. With such an abundance of great hops on our doorstep it doesn’t really make sense for us to buy hops from elsewhere.”
Gadd added: “We want the fortnight to be a success not just for ourselves but for the UK’s hop industry. It would be a national tragedy if this part of our history and heritage was allowed to just disappear.”
The good hops guide
According to UK beer sommelier Sophie Atherton, (http://afemaleview.net/) around half of all British wine drinkers can name some of the grapes used to make their preferred tipple, but beer drinkers struggle to name even a single hop. In fact, there are 20 varieties of hops grown commercially in the UK, each of which offer different flavours and aromas to brewers.
The most common varieties in Kent include East Kent Goldings, which has spicy, honey and earthy characteristics; target, which can bring elements of pine, cedar and liquorice; and challenger, with hints of spice, cedar and green tea.
Some of the best beers made with British hops include:
Spitfire (Shepherd Neame): cask 4.2% abv, bottle 4.5%
Broadside (Adnams): cask 4.7%, bottle 6.3%
Canterbury Jack (Shepherd Neame): cask 3.5%, bottle 4%
Gadds’ Dogbolter (Ramsgate): cask and bottle 5.6%
London Pride (Fuller’s): cask 4.1%, bottle 4.7%
ESB (Fuller’s): cask 5.5%, bottle 5.9%
Wainwright (Thwaites): bottle 4.1%.
Association of British Insurers calls for an overhaul of licensing to reduce ‘tragic waste’ of young lives on the roads
Novice drivers should be subject to restrictions on night time driving and a reduced drink driving limit, according to the Association of British Insurers.
It also recommended learners spend at least a year displaying their L-plates before being allowed to take a driving test, although young people could start learning six months earlier than the current age limit of 17.
The minimum 12-month learning period would allow young drivers to gain more supervised practice, the ABI said, as it called for graduated driver licensing for the first six months after passing a driving test.
This would include restrictions on the number of young passengers that can be carried by a newly qualified driver, restrictions on driving between 11pm and 4am, and no blood alcohol content.
According to the ABI, only one in eight licenced drivers in the UK is aged 25 or under, yet they account for a third of those killed on the roads.
The association said that an 18-year-old driver was more than three times as likely to be involved in a crash as their 48-year-old counterpart. In addition, 27% of personal injury car insurance claims in excess of £500,000 result from a crash involving a driver aged 17-24.
Director general of the ABI, Otto Thoresen, said: “Radical action is needed to reduce the tragic waste of young lives on our roads.”
“A car is potentially a lethal weapon, and we must do more to help young drivers better deal with the dangers of driving. Improving the safety of young drivers will also mean they will face lower motor insurance costs.
“We have all sidestepped this issue for too long. Northern Ireland is introducing reforms, and politicians in Westminster should follow their lead in introducing meaningful reform to help today’s young drivers become tomorrow’s safer motorists.”
The report looked at policies adopted in other countries and found that graduated driver licensing had reduced the number of crashes involving young drivers.
It said: “The situation can be improved and countries similar to ours such as the United States, Canada, Australia and New Zealand have introduced bold measures that have improved the safety of young drivers, namely introducing graduated driver licensing.”
Young drivers have faced steep rises in insurance costs over the past few years. In April, figures from the AA showed that while premiums for men aged 40-49 had gone up by 6% since April 2010, those aged 17-22 had seen increases of 40%. It is not uncommon for young drivers to be quoted thousands of pounds to cover their car.
Car insurers have been introducing telematics technology which tracks how a car has been driven as a way to reward young motorists who drive carefully and at the safest time of day, and research by one insurer suggested this is effective.
However, more use of this technology was not included in the recommendations.
Cabinet Office minister to commission research into how foreign governments employ civil servants as he plans reform
In a fresh sign of the coalition’s frustration at the civil service, the Cabinet Office minister Francis Maude will announce today that he is commissioning research into how foreign governments make civil servants personally contractually accountable to deliver ministerial objectives.
Maude wants to look at changing the balance between the permanent neutral civil service and introducing a larger politically appointed element, as in France and the US.
One possibility is replicating the Austrialian model that requires all permanent secretaries to offer their resignation on the appointment of a new government.
But the £50,000 research by a thinktank will also look at radically different models, such as the US where large parts of the civil service are replaced with the election of each administration.
It is the first time since the publication of the government civil service reform white paper earlier this summer that Maude has acted in his commitment to seek policy insights from outside the civil service.
Maude is offering a £50,000 contract and expects a report from the commissioned thinktank or academic by the late autumn.
Likely candidates for the research project include the thinktank Reform, the Institute for Government or the Constitution Unit at UCL.
Maude said: “While we are rightly proud of our civil service, we shouldn’t hubristically assume that there’s nothing we can learn from other successful governments, whether like Australia and New Zealand where they have political arrangements which are broadly similar to ours, or like Singapore or the United States where they are more distinct.
“To meet the future challenges of our fast-changing world, Britain’s civil service will need to continue to change and adapt, and that’s why we are determined to draw on new ideas.”
A ministerial source said: “Every option is on the table. It would be very arrogant to assume that the way we govern is unimproveable. Francis Maude is very clear he wants to look at radical models.”
The Cabinet Office said would look very closely at the New Zealand model where the equivalent of permanent secretaries are under a contractual model to deliver ministerially set objectives.
The review will also look at the French model where ministers have a larger politically appointed private office.
Ministers have been repeatedly frustrated in Britain that civil servants can avoid personal responsibility for errors they make by arguing that ministers are accountable to parliament for everything that happens in their department.
The thinktank Reform, one of the most influential critics of traditional civil service neutrality, argued before the election: “The doctrine of ministerial responsibility should be abolished. It not only shields officials from taking personal responsibility for their actions but also draws ministers into the process of delivery.
“Instead, ministers should be responsible for the strategic direction of policy and its communication. Officials should be personally responsible for the construction of policy and the use of resources.”
Ironically the Conservatives were very critical of Labour’s politicisation of the civil service, and the large number of special advisers, promising to cut them back as part of the a cost-cutting exercise. Since then figures such as Steve Hilton, David Cameron’s former director of strategy, have become frustrated at the slow pace of the civil service, and its apparent conservatism.
Most intelligence officers were deeply sceptical about UFOs, but saw the need to cover their backs
Britain’s defence intelligence agency considered the possibility of alien craft visiting Earth and asked “UFO desk officers” to monitor any potential threat from outer space, hitherto top secret documents released on Thursday show.
Thousands of pages of highly classified files document how officials in the Ministry of Defence were worried they would be accused by the public of not taking UFOs seriously enough, and how some thought there really could be someone out there. “It was important to appreciate that what is scientific ‘fact’ today may not be true tomorrow,” a defence intelligence officer warned in August 1993.
He pointed out: “It was only a few hundred years ago that ‘scientists’ believed that the Earth was the centre of the universe.” He added: “It was generally agreed until early this century that the atom could not be split.”
Sightings of alleged UFOs could be explained by very strange-shaped clouds, ball lightning, or US “black” (secret project) aircraft, the unidentified official suggested.
“If the sightings are of devices not of the Earth, then their purpose needs to be established as a matter of priority. There had been no apparently hostile intent and other possibilities are one, military reconnaissance; two, scientific; three, tourism.”
The clearly frustrated intelligence official observed that the MoD might have taken the prospect more seriously if UFOs had “a red star painted on them”, a reference to the Soviet Union.
The selection of documents released to the National Archives is the ninth tranche of the UK’s “X-files” to be made public since the government decided in 2008 that keeping them secret was no longer justified.
Some intelligence officials were excited about the prospect of harnessing rare atmospheric plasmas initially claimed to be UFOs, such as ball lightning, for novel weapons technology. One even suggested that if craft from outer space really did exist, the MoD could adopt their stealth technology.
Most officials in the MoD were deeply sceptical. Papers released today show that back in 1979, a UFO intelligence officer wondered why aliens would want to visit “an insignificant planet [the Earth] of an uninteresting star [the sun]“.
But officials had to cover their backs because of persistent claims of UFO sightings and questions from the public. MPs also regularly returned to the subject, requiring answers from the prime minister. In 2009, before he was elected, David Cameron promised to publish Whitehall’s remaining secret files on UFOs.
“I don’t think any of us have any clue whether there’s intelligent life out there, and it is certainly not something that any government should seek to hide from anyone,” he said.
John Major told MPs in 1996: “The government has no plans to allocate resources to researching extraterrestrial phenomena.”
The MoD did, however, decide to devote more resources on a study as officials warned Tony Blair he could expect even more questions following the passing of the Freedom of Information Act. A MoD official reported in 2000 that the study concluded: “Many of sightings can be explained as mis-reporting of man-made vehicles, [and] natural but unusual phenomena.”
In a valedictory note in December 2008, the last unidentified “UFO desk officer” – described yesterday by David Clarke of Sheffield Hallam University, author of The UFO Files, as “one of the strangest jobs in Whitehall” – wrote to the RAF’s operations headquarters in High Wycombe. “The MoD’s position on UFOs, aliens and extra terrestrials is quite clear. We know of no evidence to confirm the existence of aliens, spaceships, extra terrestrials etc, or if they have visited the Earth.”
Suggestions that there were secret teams of scientists “scurrying around the country in a real-life version of the X-files” was “total fiction”.
But in a perhaps reassuring conclusion, the officer continued: “However, since the universe is a very large place and mankind has only explored a very small corner of it, we cannot rule out the existence of intelligent life on other planets. We therefore remain open minded on the topic. In the absence of proof either way, this position seems a perfectly sensible one. However, as you can probably guess, the above position does not make very interesting headlines nor, I suspect, would sell many books”.
Ministers and the MoD have been inundated with claims of many hundreds of sightings of aliens. They include: two tall silver-suited “faceless humanoids” in Wales, three tall “men in black” in Spalding, Lincolnshire, and “golden orbs” across Britain – the result of a craze for releasing sky lanterns.
A mounted police officer reported a sighting of a “square/diamond shaped object moving across the sky and changing shape” while on duty at Chelsea football ground in 1999.
Files released on Thursday show the MoD recorded “UFO sightings” throughout the UK, from the Orkney Islands to Cornwall, and in Belgium, France, Germany, the Netherlands, Thailand, New Zealand and the US.
Your city editor seems to downplay the significance of the actions by Barclays (Other banks in our sights over rates, says FSA, 28 June). What she describes as a record-breaking fine by the FSA is a fraction of the fine by the US authorities. The reality is that once a bank starts manipulating the Libor interest rates, that means the banking system is not just reckless but corrupt. The government’s banking proposals address none of this. They instead reiterate the concept of Chinese walls and firewalls … which are precisely what have failed.
• There could be no greater contrast between Barclays and other banks with Quaker roots. The founders of the Quaker banks were serious people, who invested in Britain’s industrial revolution. Short of putting Quakers back in control, it is difficult to see how these modern leviathans can now be reformed.
Whanganui, New Zealand
Design a new highway code, bin the rules that most infuriate you. Invent ones that would smooth journeys, save fuel and lives
Here’s a game to pass the time while you inch forward in the petrol queue this weekend. Design a new highway code. Bin the rules that most infuriate you. Invent ones that would smooth journeys, save fuel and even lives. Undertaking, for example. If only it was allowed, it would end all that aggressive tailgating, defuse the frustration of being stuck behind the only driver who thinks 55mph is the appropriate dual carriageway maximum, and keep drivers alert. Boris Johnson wants cyclists to be allowed to turn left through red lights, as French cyclists can when turning right. Plenty of campaigners would like a blanket 30mph limit on rural lanes, or 20mph in urban streets. The fear is always the chaos of changes. But last week, New Zealand – which has the third highest car ownership in the world – abandoned its mystifying give way to the right rule. Although prior surveys suggested that hardly anyone understood what was happening, in the event the most exciting report it provoked was “mild confusion” in Tarankai. But changing the give way rule – so often urged on France, where technically it is still in force – is nothing compared with changing which side of the road you drive on. Back in the 60s, a north European rush to the right occurred almost without incident. In 2009, Samoans, instructed to make the opposite change, feared catastrophe. But the move went without a hitch. Maybe there’s a lesson here about shared space and common responsibility that could be applied more widely?
• CD sales fall 9%, but European growth helps digital rise by 8%
• Sopa and Pipa protests were ‘hysterical’, says industry
Global music revenues last year fell by the smallest amount since 2004, as industry executives warned that the “hysterical” reaction to the proposed Sopa and Pipa laws in the US will not derail their battle against digital piracy.
Total global music sales dipped 3% in 2011 to $16.2bn according to estimates from international music industry body the IFPI published on Monday. The news came as record labels hailed government action to crackdown on pirate websites — with notable victories including LimeWire, Pirate Bay and the recent international police raid on MegaUpload — and a surge in usage and growth of legal music services.
CD sales, which account for two-thirds of global revenues, continued to plummet, falling 9% during the year. While the rate of decline is still sizeable, the fall remains an improvement over the 14% drop recorded in 2010.
Digital sales, meanwhile, rose by 8% in 2011, crossing the $5bn mark for the first time, a welcome sign after the alarm of 2010’s figures which saw growth more than halve year on year to 5%.
This was fuelled by the international expansion of Apple’s iTunes, Spotify and Deezer and a surge in users accessing content using smartphones and tablets. As a result the number of users paying to subscribe to a music service leapt 65% last year to 13.4m.
The IFPI chief executive, Frances Moore, said that record companies had performed well against the backdrop of internet piracy. She also criticised opponents of Sopa and Pipa – which were shelved after a campaign that included Wikipedia closing its English website for 24 hours and tech giants such as Google and Twitter expressing their concerns – vowing that the battle is far from over.
“What is quite clear is the US remains committed to fighting piracy,” said Moore. “We’ve seen it with Megaupload and last year with LimeWire. In the long run it is never easy to move these things forward, especially with the type of hysterical reaction we have seen [to Sopa and Pipa]. Other parts of the world consider [potentially blocking illegal sites] proportionate. It is not a case of if the US will tackle piracy, it is how the US will tackle piracy. They are not backing off.”
Rob Wells, president of Universal Music’s global digital operation, was more philospohical about what the setback in the US meant for the industry. “Debate is extremely healthy,” he said. The fact it is on the front page will pique people’s conscience. It has flushed out the resistance and we know the scale of the opposition, which I like.”
The IFPI highlighted victories against piracy from government action in New Zealand and France as well as a partnership with payment companies that has halted the provision of services to 62 illegal sites in Russia and the Ukraine.
However, Moore was critical of the efforts Google has taken to help curb piracy, citing research that shows that half of illegal downloaders said they found the music through a search engine. He called on ad agencies to police their campaigns and stop them running on illegal websites.
“Ad agencies and search engines could be doing more,” she said. “Google has done a bit but could be doing much, much more. There is a duty of diligence they should be applying. They really are the entry point for illegal piracy. We will be pushing for more action. Last year was a hard year, with some progress, but there is still a lot to be done.”
Moore also said that the music industry remains “disappointed” by the resistance encountered by UK internet service providers in refusing to block illegal sites unless a court order is sought each time.
“There are 70 legal services in the UK but piracy remains high,” she said. “We are disappointed in the ISPs taking it all the way to the high court instead of helping clean up the market. The UK is one of the biggest markets, it should be doing better.”
The report highlights the global move towards downloads, with US digital sales overtaking physical CDs for the first time. Digital sales in the US grew by 8%.
Europe proved to be the fastest growing region for digital sales, with the rate of increase at more than 25%, with the UK up 20%. Latin America grew 15%; Asia (excluding Japan) rose by 12%. Globally 32% of music industry revenues come from digital sources, and the IFPI said this is more than the film, newspaper and book sectors.
“Have we inflected and has the industry turned a corner, time will tell, but I’m more positive now than I ever have been,” said Wells. “The problem with inflection point is that it is a moving target. Some markets have reached it, some markets haven’t. I think 2013 is a pretty safe bet.” However, he added: “I’m known as an industry optimist and a champion of the silver lining.”
Sixty members of staff have already been made redundant and five of the company’s 36 stores have closed
The children’s clothing chain Pumpkin Patch has become the latest high-street retailer to fall into administration, putting 400 jobs at risk.
Sixty members of staff have already been made redundant, and five of Pumpkin Patch’s 36 UK stores have been closed, but the administrator Deloitte said it intended to continue trading until “strategic options” had been explored.
Despite the closure of stores in Cambridge, Cheshire Oaks, Leeds, Swindon and Uxbridge, the administrators said Pumpkin Patch’s overseas and online operations would not be affected.
The Reading-based UK arm of the New Zealand firm joins a growing list of retailers to have hit trouble since Christmas. La Senza, Peacocks and Past Times have all gone into administration since the start of the year.
The Deloitte administrator Daniel Butters said Pumpkin Patch had suffered from the unprecedented and prolonged downturn in UK retail.
“We will continue to trade the business while we explore all strategic options,” he said. “We encourage all parties to remain supportive while we continue to trade the business, thus providing the best possible platform for us to preserve jobs and value for all creditors.”
Pumpkin Patch’s first UK shop opened in Bromley, south-east London, in 2000, and since then the business has expanded to places including Bristol, Nottingham, Belfast and Cardiff.
The business was first set up in 1990 in Auckland, New Zealand, and has 200 stores employing 3,000 people in four different countries.