WSTA Market Report: Budget relief a welcome tonic for wine and spirit sector

The latest WSTA market report reveals another tough trading period for the wine and spirit sector and validates the Chancellor’s decision to scrap the alcohol duty escalator in the recent Budget.

The report shows that wine and spirit sales continued to struggle in both the on and off trade and that the expected boost over the Christmas period failed to materialise.

Despite the tough trading conditions there were some bright spots in individual categories with sparkling wine continuing its impressive volume growth and liqueur sales booming on the back of the increased popularity for cocktails.   

The report shows:

Off trade

  • Wine sales fell -2% for the year and -3% in the latest 12 weeks – the fourth consecutive year that sales have fallen
  • Spirits sales were down -1% for the year
  • Sparkling wine was once again the star category performer, with sales up +8% for the year and +7% in the short-term. Since 2011 sparkling wine sales have increased by 23% 
  • Champagne sales fell by -2% year on year, in line with the trend for wine.
  • Imported whiskey continued its strong performance, boosted by the promotional focus it received over Christmas, as like-for-like sales increased +9% in the last 12 months
  • Wine from Argentina and South Africa enjoyed a strong boost, up by +20% and +15% respectively for the year
  • Prices continue to increase at a much higher rate than volume sales across most categories.  While largely a result of higher duty rates there is some evidence to suggest consumers are moving towards higher-priced products with premium products faring well in all categories over Christmas

On trade  

  • Total alcohol sales across pubs, bars and restaurants were down -6% for the year largely due to a -7% fall in beer sales
  • Wine sales fell by -2% for the year and remained flat over the latest 12 week period.
  • Spirits sales were up +1% over the year but declined by -1% in the latest 12 weeks
  • Despite the difficult trading period sparkling wine, liqueurs and malt whisky all enjoyed double digit growth in volume sales. Malt Whisky led the charge with +20% growth for the year however performance slowed to +7% over the short term.
  • Sparkling wine grew by +11% for the year and was up +16% in the latest 12 weeks, compared to a +2% increase over the year for Champagne and a -1% fall in the short term.
  • Liqueurs enjoyed a +10% growth in sales for the year on the back of increased popularity in cocktails.  

Commenting on the market report, WSTA Chief Executive Miles Beale said:

“The Chancellor’s decision to scrap the alcohol duty escalator and freeze duty on spirits will be a welcome boost for consumers and the wine and spirits sector following years of above inflation price increases.

Despite the tough trading conditions there is cause to be optimistic as categories such as sparkling wine and liqueurs continue to enjoy strong growth, and the move to premium products suggests that consumer confidence may be returning to the industry.”    

The WSTA's market report draws on data from leading independent sources including Nielsen, CGA Strategy and the Wilson Drinks Report

For more information and to request a copy of the market report please contact William Boyack

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