H & C News recently published an article (see below) on the call by Accolade Wines, the UK’s number one wine company, for unity across the drinks trade in a bid to encourage the government to re-think the alcohol duty escalator. Accolade’s WineNation 2012 Report had revealed the level to which tax is having a crippling effect across the industry.
At the same time, Accolade supplied facts on rising on-trade prices and the damaging effect they are having on sales:
- WineNation Report 2012 reveals average price of a bottle of wine in the on-trade moves up to £15.31 up 2.36% from last year
- Average price of non-branded wine in on-trade tops £17
- This has led to sales plummeting by 2.1m 9L cases in two years/ 1.4m 9L cases drop in the last year
Relentless price increases lead to falling sales
Years of relentless price increases in pubs, bars and restaurants have led to falling sales, as consumers are increasingly turned off by the rising prices.
Paul Schaafsma, General Manager for UK, Ireland and AMESCA at Accolade Wines, said:
“These figures are food for thought for the on-trade. The whole on- and off-trade is struggling due to ever-increasing tax rises. The information in the WineNation Report is another warning sign that the alcohol duty escalator is not working. The government needs to look at the burden it is placing on small businesses.”
One area that has actually seen growth is branded wines. The average price of key brands is much lower than the total average at £12.37. And there is clear evidence that Newbies (New to wine, younger adult drinkers) and Strong Prospects (potential wine enthusiasts) demand well-known brands in the on-trade.
Fast facts
- New World wines’ share of the on-trade market is now at 49% – an increase of 2% on last year
- 93% of the decline in still wine value can be attributed to Old World wine
- 73% of the still wine value losses have come from hotels where prices have risen twice as fast as the rest of the on-trade
- On average, branded wines are at least £5 cheaper per bottle than non-branded wines, and the price of branded wine is rising at half the rate
- This year restaurants overtook hotels as the biggest outlet type for wine sales by value
For the original H&C News article click here