J. Gregson: In Vino Veritas

‘We should get some economies of scale on our reds from this year onwards,’ said Beaumont. ‘I calculate that we should increase our production of them substantially over each of the next five years.’

‘Economies of scale will depend on us shifting everything we produce,’ pointed out Davies. ‘We’ve had to work very hard to clear all the reds in the last couple of years.’

There was a tension between him and Beaumont which everyone in the room could feel. Beaumont was a man who didn’t like to be challenged too openly or too far, whilst Davies for his part was not prepared to let anything go which might cause him trouble in the future. The Welshman now said, as though making a concession, ‘The new sparkling wines have gone quite well. Quality and flavour don’t seem to be too important with sparkling wines.’ He glanced up at the faces in the quiet room, wanting to see their reactions. ‘A lot of the people who drink sparkling wines don’t seem to be wine drinkers at all, you see. It’s used mainly to celebrate family or group achievements, and everyone has a glass or two.’

Beaumont knew that their latest champagne-type wines were better than that, but decided that he would not be insulted. ‘So long as we sell whatever we produce in the way of sparkling wines, we need not concern ourselves too much with what motivates the drinkers,’ he said affably. ‘How is the beer we agreed to stock selling in the shop?’

‘The Dog’s Whiskers pump? Surprisingly well.’ Davies spoke eagerly, as if he too were anxious to move on from controversial ground. ‘The brewery gave us an astonishingly good margin because they were so anxious to get in here, so we couldn’t really lose on it. Nevertheless, it’s sold well. There are still quite a lot of real ale enthusiasts who come in here to buy our wines.’

Beaumont nodded. ‘We are talking about the heartbeat of our business when we discuss shop sales. Everything else is driven by the profits from the shop. Are there any comments from our financial director?’

Alistair Morton had spoken not a word throughout the meeting, confident that his expert view would be demanded if he bided his time. For better or worse, accountants controlled the finances and thus the policies of many businesses nowadays. He cleared his throat and said, ‘I think it’s time we began to distinguish between the retail activities of the shop and the mail-order business, which is increasingly important. It may be a better indication of the way we should plan for the future than the changing week-to-week takings in the shop. In my view, it is the orders we secure for many cases of wines at our discount rates which are a better reflection of our progress than anything else.

‘There is now a steady take-up on our products from restaurants — not all of them local — and some of the specialist wine shops. As our production expands over the next few years, it is this wholesale trade which is essential to ensure that we sell in the quantities required.’

It was a long speech and a prepared one, but none the worse for that. People listened carefully because they expected considered, not spontaneous, views from people who advised about finance. Even dullness was allowed, if it made commercial sense; indeed, to some people, dullness was almost a guarantee of accounting respectability and reliability.

Beaumont nodded his agreement. ‘And what do you foresee for us in the next two or three years, Alistair? There are plenty of prophets of gloom and doom about, but I think we are better placed than most to come through a recession.’

Alistair Morton took his time. ‘No one can make reliable forecasts, because no one knows yet how deep or prolonged this slump is going to be. There are two key factors for us, as for any business: turnover and margins. As with any other agricultural crop, we have to be certain that each year we can grow and market a good harvest. Assuming we can do that, our success or otherwise will then depend on what profit margins we can maintain on those products. So far, we have managed to maintain our overall net profit margin at eleven to twelve per cent. Whether we can do that during the next two or three winters remains to be seen.’

Gerry Davies said a little mischievously, ‘But it’s your view that we can do that?’

‘There are too many imponderables for me to say that. We shall have to see whether demand remains buoyant when most people haven’t as much to spend on luxuries. Despite our increasing turnover, all the evidence is that English wines are regarded as luxury spending.’

Morton glanced at Beaumont at the head of the table. ‘So far, we have managed to keep a healthy margin on all of our wine sales. We shall have increased supply again this year — probably twenty to thirty per cent more in the reds and ten per cent in the whites, if we have a decent harvest. Whether we can continue to increase demand and keep sales buoyant during the biggest recession on record will be the great question for all of us in the next two years.’

Beaumont said, ‘I don’t think times are going to be as bad as that, as far as spending power goes. We are a much richer nation now than in the thirties.’

Alistair Morton decided that as the supposed expert on the economy he would offer a little comfort. ‘That is certainly true. And the world seems to be determined to be less passive about this slump than the one in the thirties. More important, we are a completely new industry, which didn’t exist in the thirties. We should be able to think on our feet and devise solutions for ourselves. I am encouraged to hear talk of economies of scale. It might be possible to reduce our prices per bottle over the coming decade, whilst keeping our overall profit margins the same.’

Beaumont nodded. ‘That should be our overriding thought, I think. It is something which none of us can achieve alone, but which we should be working for as a team. Unless anyone has any other urgent thoughts, I think we should leave it at that for this morning.’

He hastened to close the meeting on an upbeat comment. ‘I’d like you to reassure all our staff that no one’s job is in danger at the moment. We have a good workforce. I want to keep it intact if I possibly can.’

Martin Beaumont sat for a while in his office after everyone had left. The meeting had gone well, he thought. No one had raised anything that was particularly embarrassing. He thought he’d succeeded in putting some important people on their toes for the year ahead.

He was much better at estimating his own performance than other people’s reaction to it.

Detective Sergeant Bert Hook was not usually nervous. The roughest young thugs of Gloucestershire and Herefordshire had often found that out the hard way when they had thought to intimidate him. Proficient batsmen in the Minor Counties competitions had found themselves hopping about on the back foot when they had underestimated his pace as an opening bowler.

Yet today Bert was uncharacteristically uncertain. He turned the white foolscap envelope over and over between his short, strong fingers. He decided several times to slit its flap decisively with his paperknife, yet each time desisted and went back to looking at his neatly typed name and address on the address label. He knew whence this missive had come and knew its purpose. Yet he could not bring himself to meet its simple message. It was one of those letters where you dearly wanted to discover the contents, yet at the same time feared to know them. If the human brain is a complex thing, the human mind is even less predictable.

‘It’s come, then.’

He leaped at the sound of the familiar voice, as though detected in some criminal act. ‘I didn’t know you were there,’ he said accusingly.