Fantastic announcement across the board. I'm most excited about the bonded storage solution. One of the Dean's tenets for the business has been to deliver financial opportunities that clients can't say no to. We saw this in the support package that was offered to producers to alleviate the economic hardships they were suffering several months ago. We saw this in the third-party (and therefore deviate liability) CaaS solution that was announced recently. And now we're seeing it again today. As WineDepot grows from a wine business to a drinks business (something that is already being realised), it is important that they meet the needs of these other industry sector. The difference between the WET and the Excise Tax is absurd and it grows more absurd every six months due to incrementation. This is most easily demonstrated by a historical comparison of the Alcohol and Tobacco Sub-Groups of the Consumer Price Index as per below:
What Dean is doing here is addressing this absurdity in a more direct way than producers are currently capable of. Over the past several years, producers have been side-stepping the Excise Tax by growing their light-alcohol and zero-alcohol products to ensure they pay the Excise Tax in a lower bracket. This is quickly becoming extremely lucrative for them and that is demonstrated by their increased marketing focus on these products. But its still not enough. The reality is that while more consumers drift towards these products, they will never comprise the majority of the beer or spirits markets. Therefore, Dean is addressing that reality directly by providing smaller-scale producers (who usually do not produce light-alcohol or zero-alcohol products) more ways to defer the absurd cost of the Excise Tax. Specifically, excise bonded storage is a system whereby excise equivalent goods are stored at a licensed warehouse and are not excise taxable until they leave storage for delivery. For small producers especially, paying the absurd excise tax weeks or even months before the product is sold to the end-consumer is one of their largest initial growth obstacles. Dean puts it best: “...we will be able to increase the number of sites where we offer bonded storage. This has massive cash flow advantages for our customers who’s range includes beer and spirits as it allows them to delay the excise and duties payable, which should in turn increase our addressable market.”
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