Wine prices set to rise after drought hits grape harvests in Spain and Italy.

This would usually mean more money for the Government as they take a percentage of any increase but I think the rising cost of living in the UK is really starting to bite now. I know of several regular drinkers who have moaned about the increasing cost of wine and have taken the opportunity to cut back on buying/drinking. I have been drinking my stock over the last year or two and have bought very little, mostly cases of everyday whites when on offer, I plan to maintain a modest rack in future and drink less.

Mel, do you have access to recent UK consumption / sales stats?

_________________
Yep, Im still here.

I came across this on the WSTA website:

The price of wines and spirits has risen by more than twice the level of inflation according to the latest WSTA Market Report, with consumers paying 6.5% more than last year for wines and spirits. Inflation for the year to end of April 2012 was 3%.

Yet against a backdrop of declining sales overall, sales at the upper end of the market continue to grow. Wine sales above £10 were up 32% by volume in the off trade. This trend was also reflected in the on trade with sales of malt whisky up by 31% in volume.

• Wine and spirit prices in the off trade have increased by 6.5% on average in the year to April 2012 whereas inflation for the same period was 3%.
• Sales of wine in shops were down 3% in volume in the last 12 months and sales of spirits were down 2%.
• Sales of wine dropped by 8% in volume in bars and restaurants for the year to March 2012 and sales of spirits were down 1%.
• Sales of wine in the £7-£8 in the off trade were up 30% by volume for the year.
• Sales of malt whisky have gone up by 31% in the on trade


The WSTA Market Report draws on data and analysis from Nielsen (off trade data to end April 2012), CGA Strategy (on trade data to end March 2012) and the Wilson Drinks Report.

The detailed data reveals that:

• Off-trade sales of wine at higher price points grew significantly
• The average price of alcohol has increased across all categories in the off trade
• Liqueurs are the only spirits category which showed declines in value in the off trade over the last year
• Sales of Champagne in bars and restaurants have decreased by 13% in volume whereas sales of sparkling wine have increased by 2%
• RTDs continue to decline in the on trade (-3% in volume) as consumers appear to be turning to Cider (+6% in volume)

Commenting on the latest market report WSTA interim Chief Executive Gavin Partington said:

“The above inflation increase in the prices of wines and spirits comes as consumers are feeling the pinch and being forced to cut back so it’s perhaps not surprising that volume sales overall are depressed.

“But there are encouraging signs elsewhere with wine at higher price points showing strong growth over the year.”

_________________
mel

Consumer expenditure on alcoholic drinks is about £40.7 billion.

UK tax (excise duty) is £1.90 on a 75cl bottle of still wine, £2.43 on a 75cl bottle of sparkling wine and £7.04 on a 70cl bottle of spirit (at 37.5% abv).
The UK alcoholic drinks industry paid nearly £15 billion in excise duty and VAT in 2009/10.

The UK's annual consumption per person is 27.9 litres on wine, 2.2 litres on spirits (@100% alcohol) and 106.4 litres on beer.

The UK alcohol industry directly employs more than 650,000 people in the production and retailing of alcohol and supports a further 1.1 million jobs in the wider economy.

_________________
Four wheels move the body - 2 wheels move the soul.

Thanks Mel, interesting stats.



I think this the tail-end of the trade-up phase encouraged by retailers and media over the last few years, people are generally more savvy when it comes to buying wine helped by the wealth of info now available. I’m not sure if this trend will continue tho, particularly if the middle classes continue to get squeezed in the coming years. It must be really tough for the old world producers at the mo, a perfect storm.

_________________
Yep, Im still here.

Good post GK, and I've also been drinking claret stock as well. As for life style choices that I've recently seen -

I'm pretty certain that trend is ebbing now. and I'd predict that futher duty hikes will precipitate further falls in mid price range wine sales
Among my friends who had reduced volume, and had upped the anti for better quality; They also feel that the hikes in duty have been punitive. they have been following the government's guidelines on consumption, and resent being clobbered from both sides.

The Treasury are desperate for the tax and duty and the GMC are calling for moderation. A similar story with Petrol has been going on for two decades now.

However, consumers, and road vehicles in general don't need wine to get folks to work and back !

For the 9 month period to late August, stronger sterling versus the Euro had saved UK consumers the 2.5% VAT add on, and the duty last time on European wines released this year - But I believe the prospects for the old world will be less favourable in the UK when the ECB sort out certain euro countries, exactly those, who have experienced the drought !

_________________
Duncan

I’m surprised we haven’t started seeing bottle size reductions on the shelves, down to say 650ml (from 750ml). It’s happening with almost everything else, it could be passed off as a good thing- less consumption, better for your health......... don’t mention the hidden inflation.

Seriously though, is there any reason why standard bottle sizes can’t drop to 700ml or lower? Perhaps nobody wants to be the first to make the move.

_________________
Yep, Im still here.

My favourite cheese & onion crisps have sneakily gone from 30gm to 25g.
16% reduction in content, same price.
Big exposé of Poundshops on TV tother night.

_________________
Four wheels move the body - 2 wheels move the soul.

_________________
Yep, Im still here.