Pubs increasingly reliant on wine and spirits sales

New figures show pubs are becoming increasingly reliant on wine and spirit sales, which are being served in equal measure with beer in new gastro pubs and bars.

The new research from CGA Strategy shows the proportion of wine and spirits sold in pubs, bars and restaurants (the on-trade) is on the up, generating an estimated £280m increase in revenue for the on-trade between 2013 and 2014.

Miles Beale of the Wine and Spirit Trade Association (WSTA) appealed to the Chancellor to "call time" on the alcohol duty escalator, which will increase duty by 2% above inflation, and freeze duty in Wednesday's Budget to help save the British pub.

In 2013 the Chancellor used the Budget to announce the end of the alcohol duty escalator for beer in a bid to help save the British pub. However, the escalator was retained for wine and spirits, increasing duty by 2% above inflation and costing pubs, bars and restaurants more than £34 million in additional taxes.

Forecasts from CGA Strategy show that wine and spirit sales in the on trade are on the up. Wine currently accounts for around 18% of the total value of drinks sold in the on-trade, but the research commissioned by the WSTA indicates this will increase to almost 20% by 2018 while spirits sales will increase from 22% to 24%. Meanwhile beer and lager sales are set to decrease from around 50% to 47% over the next four years.

The figures show that newly opened bars, restaurant and pubs are relying even more on wine sales, which make up over 22% of their sales (with spirits accounting for 18%), compared to 40.2% for beer and cider. Meanwhile, in pubs that are closing, wine accounts for a much smaller proportion of sales – just 12.3%, compared to 58.5% for beer and cider sales.

With just days to go until the Budget, the WSTA is calling on the Chancellor to scrap the alcohol duty escalator and freeze alcohol duty.

Miles Beale, Chief Executive of the WSTA, said: “These figures show that pubs, bars and restaurants are increasingly reliant on wine and spirit sales to bring in revenue. We are calling on the Chancellor to help save the British pub by scrapping his inflation-busting alcohol super tax at the 2014 Budget. This will also be welcomed by responsible drinkers in hard-pressed times.”

Notes to Editors 

- 79% of an average priced bottle of spirits and 57% of an average priced bottle of wine is now accounted for by tax 

- Independent research from Ernst & Young has found scrapping the ADE will boost the public finances by £230m and create 6,000 new jobs in 2014 alone

- UK consumers pay a staggering 38.8% of all alcohol duty collected in the EU - this is more than France, Germany, Italy, Poland and Spain combined

- Wine and spirits are worth £5.5bn to pubs in the UK and make up 42% of the value of drinks sold in the on trade. Scrapping the ADE would provide a significant boost to the pub industry.

The WSTA is the UK organisation for the wine and spirit industry representing over 340 companies producing, importing, transporting and selling wines and spirits.

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