Transparency data

Government Hospitality wine cellar bi-annual report, 2018 to 2020

Published 15 July 2021

Introduction

1. This Bi–Annual Report on the Government Hospitality (GH) wine cellar is published as part of the commitments made by the previous government following the review of the GH wine cellar in 2010, the results of which were announced in May 2011. The report is designed to offer a transparent and comprehensive overview of the usage, value, costs and stock levels of the wine cellar, as well as broadening the understanding of how the cellar is used to support the work of Government Hospitality in delivering business hospitality for all government ministers and departments.

2. The report has also been prepared to offer insight into the management of the cellar and demonstrate the value for money that the cellar provides. The purchasing of wine at relatively modest prices and its retention until ready for use allow Government Hospitality to provide guests of the government, from home and overseas, with wines of appropriate quality at reasonable cost.

3. Government Hospitality is advised on the purchasing and management of the stock by an ad hoc advisory committee, the Government Wine Committee (GWC). Meeting approximately three times a year, the four Committee members of the GWC are Masters of Wine, and give their advice un-paid. The Chairman is a retired senior Diplomat, who is also un-paid.

4. This report covers the period 1 April 2018 to 31 March 2020. It was not possible for the annual report 2018-19 to be released prior to the preparation of the 2019-20 report, so the two have been combined.

5. Figures for bottles used and costs or values have been rounded up or down to the nearest whole number. No distinction is made between half bottles (37.5 ml), whole bottles (75 ml) or magnums (150 ml) of wine.

6. Wines are generally described by country of origin, but in the case of France and Germany, wines are defined by their region of origin.

History and background

History

1. The establishment in 1908 of the former Government Hospitality Fund to provide hospitality services for high-level visiting overseas government guests and domestic guests led to the requirement to structure the purchasing of wines for these events. In 1922, the constitution of the Government Hospitality Fund Advisory Committee for the Purchase of Wine led to the creation of the Government Hospitality (GH) wine cellar that still exists today.

2. The wine cellar has been located in the basement of Lancaster House for many years, although at various stages in the 20th century some of the cellar stock was housed in other government buildings (eg. Downing Street, Carlton Gardens, etc). After the outbreak of World War II, wines from the German Embassy were requisitioned and added to the cellar stock. For part of the war, the bulk of the cellar was re-located to Warwickshire for safe-keeping.

3. Lancaster House has been the working base for Government Hospitality for over a century. With the completion of the post-war refurbishment in the 1950s the house was used exclusively for government entertainment and large conferences and meetings. This is still the prevailing purpose of the house, now managed as part of the Foreign, Commonwealth & Development Office estate.

Background

4. The Government Hospitality wine cellar is a working resource that is used only to support Government Hospitality in its service delivery. Wines are bought young and relatively inexpensively and held in the cellar, so that they can be used when fully mature. Wines for use on large-scale receptions are bought in bulk on an ad hoc basis (usually 3-4 times a year).

5. The selection of wines for the cellar is carried out on the recommendation of the Government Wine Committee (GWC). Formerly a registered NDPB (non-departmental public body), the Government Hospitality Advisory Committee for the Purchase of Wine, the Committee was removed from the Cabinet Office list of NDPBs as part of the Public Bodies Reform process announced in October 2010. The Chairman (currently Sir David Wright, former Ambassador) and the 4 Masters of Wine members of the Committee make their selections for purchases based on blind tastings. The Committee has no budget. The Head of Government Hospitality ultimately decides whether or not to accept the Committee’s recommendations, depending on the balance of the cellar and resources available.

6. Wines are selected for use depending on the guidance offered by the GWC on grading, quality and readiness. Government Hospitality staff select the wines to be used on each event, depending on the nature of the event, seniority of the guests, etc. Ministers and senior officials hosting events do not select wines but are notified of the selections made on their behalf.

7. After the election in May 2010, the then Secretary of State for Foreign and Commonwealth Affairs asked that a review of the Government Hospitality wine cellar be conducted, in-line with other areas of government expenditure, to ensure that the cellar was delivering value for money, and examine whether the running of a cellar was the most cost effective way to supply wines for GH’s business hospitality needs. The review concluded that the cellar was delivering value for money and was the most cost effective way to provide wines for Government Hospitality functions and State Banquets, but that reform was required.

8. The review recommended that:

• the Cellar should move to a self-financing regime for the medium term, with targeted sales of high value stock helping to pay for future purchases

• there should be an annual statement or report to Parliament on the use of the Wine Cellar, covering consumption, stock purchases, costs, and value for money

9. The first sales from the cellar stock took place in March 2012, delivering a £44,000 return to off-set the 2011/12 purchases of new stock, which totalled £48,955. The difference was covered by additional funds paid back to Government Hospitality by other government departments for work under-taken on their behalf. Sales have occurred every year since 2012 but were not possible in 2020 due to the outbreak of the Coronavirus pandemic in February / March 2020.

10. During the Financial Year 2018/19, sales of high value stock from the cellar delivered a return of £44,200 (cf. £50, 600 in 17/18), to off-set purchases to the value of £ 46,906 (cf. £56, 976 in 17/18). In addition, Government Hospitality was re-paid by other government departments for wines used to the value of £16,985

11. During the Financial Year 2019/20, sales of high value stock could not be completed due to the Coronavirus pandemic. Over £50,000 worth of stock was identified for sale in March 2020, to off-set purchases to the value of £73,091 (cf. £46,906 in 2018/19). In addition, Government Hospitality was re-paid by other government departments for wines used to the value of £23,220.

12. Consumption levels in 2018/19 increased cf. 2017/18 (3,935 bottles). Consumption rose by approximately 2.8% to an overall total of 4,045 bottles of wine and spirits.

13. Consumption levels in 2019/20 fell cf. 2018/19 (4,045 bottles). Consumption fell by approximately 17.5% to an overall total of 3,336 bottles of wine and spirits.

Key points

(All statistics as at 31 March 2019 and 31 March 2020)

• the Government Hospitality wine cellar contained 32,078 bottles of wines and spirits in 2019
• the Government Hospitality wine cellar contained 32,921 bottles of wines and spirits in 2020
• total value of stock at cost £788,149 for FY 2018/19, and £810,896 for FY 19/20
• numbers of bottles used in 2017/18 and 2019/20:

	2018/19	2019/20
Wines	2,082	1,658
Reception Wines white	1,318	1,091
Reception Wines red	593	522
Spirits & Brandies	52	65
Total	4,045	3,336

	2018/19	2019/20
Revenue from sales of stock (see Sales below)	£44,200	£50,000 TBC
Repayments by other government departments for wines used	£16,985	£23,220
Expenditure on new stock (see Purchases below)	£46,906	£73,091
Value at cost of stock used	£57,780	£48,689

• English wines represent 49% of new purchases in 18/19 by value and volume, and 58% by value and 73% by volume in 2019/20.

Facts and figures

• the Government Hospitality wine cellar contained 32,078 bottles of wines and spirits as at 31 March 2019

• in March 2020 the cellar contained 32,921 bottles of wines and spirits

• total cost value of stock at 31 March 2019 was £788,149 (cf. 17/18 £802,340)

• total cost value of stock at 31 March 2020 was £810,896

• estimated market value of stock at 31 March 2019 £3.269m (cf. £3.290m 17/18)

• estimated market value of stock at 31 March 2020 £3.208m

• consumption rose by 2.8% in 2018/19

• consumption fell by 17.5% in 2019/20

• bottles used in 2018/19 : 4,045 (cf. 3,935 in 17/18)
• bottles used in 2019/20 : 3,336

	2018/19	2019/20
Average cost per bottle used	£14.28 (18/19)	£14.60
Average cost per bottle of wine purchased	£15.24	£17.25
Total receipts / revenues	£61,185	£23,220

• bottles of English and Welsh wine used in 2018/19 : 2,133 (including reception wines) = 53 % of total
• bottles of English and Welsh wine used in 2019/20 : 1,867 (including reception wines) = 56% of total

Usage data

(see Annex A for detailed usage breakdown)

Summary

	2018/19	2019/20
Bottles of wine used	2, 082	1, 658
Bottles of Reception Wines (white) used	1,318	1,091
Bottles of Reception Wines (red) used	593	522
Bottles of Spirits & Brandies used	52	65
Total	4, 045	3, 336

Usage by wine varieties

	Quantity (bottles) 2018/19	Quantity (bottles) 2019/20
Alsace	18	17
Argentina	0	6
Australia	141	9
Austria	0	2
Bordeaux (Red)	248	257
Bordeaux (White – Sauternes)	12	26
Burgundy (Red)	134	110
Burgundy (White)	217	122
Canada	28	13
Champagne	13	83
English (White non-reception)	175	163
English and Welsh (Sparkling)	640	613
Loire	7	25
Mosel	15	35
New Zealand	75	21
Port	61	57
Rhine	5	6
Rhône	40	21
South Africa	210	45
Spain	0	10
United States of America	43	17

Spirits

	Quantity (bottles) 2018/19	Quantity (bottles) 2019/20
Cognac / Armagnac / Brandy	1	1
Gin	35	47
Whisky	2	16
Pimm’s	14	1

Reception Wines

	Quantity (bottles) 2018/19	Quantity (bottles) 2019/20
White	1318	1091
Red	593	522

Information on the individual costs of the wines used and purchased is not released to protect Government Hospitality’s commercial interests (Freedom of Information Act 2000, section 43 (2) exemption) and its ability to achieve significant discounts from suppliers.

Sales/revenue

In 2018/19 Government Hospitality sold stock direct to Farr Vintners Ltd. In total, a return of £44,200 was realised through sales.

The following items were sold:

Wines	Quantity
Château Margaux 1988	24 bottles
Le Pin 1986	12 bottles
Château Haut Brion 1989	12 bottles
Krug 1982 (Magnums)	6 magnums

In addition, GH took receipts for wines used on functions for other government departments (ie. events not paid for from its own budget) totalling £16,985.

Total receipts / revenues: £61,185

In 2019/20 Government Hospitality identified stock to sell valued in excess of £50,000. The advent of the Coronavirus pandemic prevented the sale from taking place. The sale revenue for FY19/20 will be rolled into FY 2020/21.

In addition GH took receipts for wines used on functions for other government departments (ie. events not paid for from its own budget) totalling £23, 220.

Total receipts / revenues: £23,220

Purchases

All costs for the purchase of new stock in 2018/19 were covered by the sales of high value stock items or monies recovered from other government departments for work under-taken on their behalf. In 2018/19 Government Hospitality spent £ 46, 906 on new purchases for the cellar, at an average cost of £15.24 per bottle. 49% of the wine purchased by volume was English or Welsh.

The following types of wine were purchased:

Reception Wines

	Quantity
Chapel Down Bacchus 2017	1, 440 bottles
Valpolicella Allegrini 2016	960 bottles

Wines

	Quantity
English / Welsh sparkling	72 bottles
Port	320 bottles
Red Rhône	264 bottles (equivalent)

Spirits

	Quantity
Gin	35 bottles
Pimms	6 bottles

The costs for the purchase of new stock in 2019/20 were covered by monies recovered from other government departments or directly funded from the budget of Government Hospitality, pending the outstanding sale postponed due to the advent of the Coronavirus pandemic. In 2019/20 Government Hospitality spent £73,091 on new purchases for the cellar, at an average cost per bottle of £17.25. 73% of the wine purchased by volume was English or Welsh.

The following types of wine were purchased:

Reception wines

	Quantity
Chapel Down Bacchus 2017/18	1,440 bottles
Valpolicella Allegrini 2018	480 bottles

Wines

	Quantity
English / Welsh sparkling	1064 bottles
English / Welsh still	588 bottles
Red Bordeaux	396 bottles
Port	204 bottles

Spirits

	Quantity
Gin	60 bottles
Whisky	5 bottles