Supermarket wine sales sink

We're drinking less but drinking better. Wine Intelligence says UK wine sales have fallen 3% in the last year.

But sales of pricier supermarket wines is up: the number of British buyers prepared to shell out more than £7 for a bottle has doubled in the last four years. So, have supermarkets got cleverer at making us spend more on wine?

Not so cheap

Wine Intelligence's Richard Halstead claims Brits are willing to spend more on a bottle of wine because of supermarkets as well as a "sustained shift in behaviour." Which means precisely what?

"If you go into a supermarket today and write down the price of all wines the average price you will find will be about £1 to £1.50 higher than 18 months ago. The main reason is that the tax has gone up in two years. Duty has increased 6.6% in the last year."


"That has a bull-whip effect. On top of that you have to add changes in supermarket margins. They will say [to a supplier] they want to maintain their margins. Plus you've got the hike in VAT. We've had two duty increases [in the last 18 months] plus the VAT rise plus the pound has fallen in value."

Manipulative?

But does it also mean supermarkets want us to spend more on higher-priced wines? "To a certain extent I"m sure it is. The margin is more on higher-priced wines but taxes are also smaller as you go up the scale."

Britain's wine drinkers have also, he says, got used to the idea of buying good food and wine to drink at home for a treat which is a significant saving when compared with a night out.

The recession has also made British wine buyers become more conservative, less willing to take a chance on new wines, or smaller independent producers.

More cautious, less risk

"Whilst promotions are still the key driver of purchase, it is being tempered by a need to trust in the product, which is driving consumers towards familiar and reassuring brands."

Recently the Wine and Spirits Trade Association claimed UK consumers - despite the on-going recession - were paying 6.5% more for wines and spirits than a year ago. Twice the rate of headline inflation.

However the fizz has gone right out of Champagne sales. Mintel recently claimed £1bn was spent on Champagne in the UK in 2007. But in 2012, that figure will have slumped to £690m, it predicts. Paradoxically, sales of sparking wines such as Prosecco have soared 50% in the last year.

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