The chancellor froze alcohol duty for the third budget in a row yesterday, and closed the gap between rates charged on still and sparkling. He also simplified the system, slashing the number of duties from 15 to six, with tax rising in line with ABV. All measures will come in from 2023.
Jay Wright told the Standard he was “delighted” at the freeze and that it “is sensible that there is a simpler system” ditching “antiquated” rules.
Virgin Wines, which floated at 197p in March, reported revenues up 30% to £73.6 million in the year to June 30. Pre-tax profits were up 86% £5.2 million. Sales over the last three months were up 13.3% on 2020 levels, pre-vaccine roll-out.
Despite supply issues facing the sector, Wright said his company will "definitely not run out of wine at Christmas" as bosses pre-stocked earlier this year.
Wright told the Standard: “We could see that there were probably some supply headwinds coming in, so we took the view back in February / March time that we would bring forward all of our shipping for Christmas by a couple of months, and that we would increase the amount we would bring in by about 20%. So we are well stocked up, and I can guarantee you we’re definitely not going to run out of wine.
“We’re really pleased we took the decision to stock up when we did, because there are a lot of businesses who have a lot of problems with getting stock in at the moment.”
Shares shot up as much as 6% on the update. Cider-maker C&C also saw shares rise by around 7% on Thursday morning.
The Dublin-based FTSE 250 drinks company - behind Bulmers and Magners - reported returning profit since June and forecast annual operating profits of €50 - €55 million (£46 - £42 million).
Revenues were up 65% on 2020 levels to €657 million in the six months to September, boosted by hospitality reopening over summer.
C&C cautioned that it is still "navigating industry wide capacity constraints" such as supply chain issues and staffing levels, however.
Overall, bosses have welcomed Rishi Sunak's budget measures as giving "breathing space", but argue the Government needs to go further to help the sector recovery.
Young's CEO, Patrick Dardis, told the Standard: "We really need a permanent reduction on business rates, or indeed a cancellation of the rates."
There have also been complaints from small brewers that the Chancellor's announced reduction in tax on draught beer will help larger firms more than small, independent operators.
Steve Ryan, owner of Dalston's 40FT Brewery, said: "A reduction in beer duty for draught beer is welcome news and help that we desperately need right now.
“However, the stipulation that it's only for containers of 40 litres and above makes no sense. Why should a pint poured from a 30 litre keg be taxed more than one poured from a 50 litre one? Most brewers I know package their beer in 30L kegs, mainly for health and safety reasons as 50's are far too heavy for anyone to carry.
"I'm hoping that this is simply an oversight that will be corrected. Although many of the larger brewers still use 50s, and cask beer slips in at just over 40Ls - but these bigger brewers wouldn't stoop so low as to lobby the government for this. Right?"
Just this week City Pubs chairman Clive Watson warned the price of a pint may have to rise by 25-30p as firms face inflating wage bills, rising input costs and a return to 20% VAT. If this occurs, budget measures cutting 3p from the price of a pint in 2023 is likely to have little impact.