Jeroboams boss Matt Tipping remains “quietly optimistic” of hitting £40m in retail sales during the current, despite the cumulative impact – and speed – of the cost increases facing the industry, which will take an industry-wide response.
Speaking to the drinks business recently, Jeroboams Group CEO Matthew Tipping said that in the last 12 months, it has seen five months of growth year-on-year, with seven either flat or very slightly down, with the market now “at that point of balance”, where it is important to maximize growth opportunities despite the rising costs from government and the economic outlook.
Cumulative effect
“It is the cumulative impact – and the speed of change – that has been most challenging,” Tipping said. “The industry has faced a series of significant cost increases with limited clarity or lead time to adapt, which has made forward planning increasingly difficult.”
He noted that retail shop business rates had increased by 16% over the current financial year, with a further inflation-linked rise of 25%+ already signalled for financial year 2027/28 and additional increases expected the year after. On top of that, excise and duty costs had seen an 18% increase year-on-year, while employer NI had increased to 15%, having a “material” effect on staffing costs.
The “ongoing fiscal drag” is not only increasing the tax burden on employees, but the potential future restrictions on salary sacrifice pensions are a concern, particularly for team members making additional voluntary contributions, Tipping noted.
Another pressure is the addition Extended Producer Responsibility (EPR), which has added a further six-figure cost to the business.
“While we fully support the principle of contributing to recycling, the current scheme is poorly structured – particularly with retrospectively applied rates,” Tipping said. “[This] makes accurate forecasting extremely difficult and adds further uncertainty at a time when the industry needs stability and predictability.”
Revenue boost
However, Tipping said he remained “cautiously optimistic” in terms of revenue, due to encouraging signs that the wine market is stabilising. “With signs of improvement in consumer confidence, there is potential for a return to modest growth over the next 12 months,” he said.
A lot of that positivity comes from the inbound demand from customers. The retail side in particular has responded to its customer needs, on a shop by shop basis, based on sales analysis and enabling the retail managers to flex their ranges to fit that better, by up to 35%.
“I do feel that’s an upward trend but where there is more concern, for me, is around the costs that are being imposed on the business by both government and by wider economic factors,” Tipping said.
One key factor that could make a difference is around business rates for retail premise.
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“We have seen some flex from the government for businesses of our size, with regard to pushing out those increases a little bit further, so there’s less of a cliff-edge, but that increase is still coming.”
It is within the government’s control to look long and hard at business rates and to “encourage good quality, independent businesses, family-owned businesses like ours just to flourish”, he said.
Another area that is causing deep concern is the direction that EPR is taking, particularly the “lack of insight in terms of how things actually work”.
As sales director Lucy Parker notes, “it feels like they put in legislation that we then have to fight against. If they just brought in the bodies in the first place and discussed legislation and changes with them, it would then save time and be more effective.”
Tipping argued that while he “absolutely believe as a responsible business, we should be paying for the recycling of the packaging that we’re using, it’s not a level playing field.”
“Getting behind the WSTA to help really push that forwards and make sure that as these develop the plans become better, is really key for the industry.”
Maximising potential
As a result of the challenges industry is facing, Jeroboams as a business is looking to maximise growth, concentrating on prioritising the team, continuing to invest in the future, “and strengthen Jeroboams competitively to be in the strongest position to convert those opportunities as they arise,” Tipping said.
Part of this has come through the acquisition of wholesale supplier Hayward Bros. Wines in January 2025 with the combined businesses coming out “much stronger, with an ability to service the whole of the UK and a bigger team,” Tipping said.
It has already carried out a “huge range review” of both portfolios to consolidate the two, culminating in its tasting earlier this year. However, this hasn’t meant cutting lines so much as broadening its reach in terms of what they can supply, including in premium Australia as well as its traditional Italian heartland, and some key producers such as Kopke (both port and still wines), renowned Australian producer Yarra Yering, Beaujolais’s Maison Jean Loron and Maison Jaffelin in Burgundy, who Parker said were both quality and volume producers, allowing them to add breadth.
With the Haywards wines as well, Jeroboams has over 600 wines in its trade portfolio, “and that’s an important differentiation between what we do on the fine wine and retail side, because obviously we have a lot more wine in total,” Parker said.
“We’ve probably grown by about 20 or 30 producers,” she said. “We’ve got really strong relationship with [them], which I think it gives the team breadth without diluting things, so there’s a focus to our business as well.”
It also boosted its sales and administration team through the acquisition, with Richard Haywood coming on board “so we’ve lots of knowledge and expertise there.”
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