Off-trade wine sales could slump by as much as 13% in volume over the next few years if prices and duty continue to escalate.
That was the warning issued by wine industry experts this week, days after Majestic Wines boss Steve Lewis said entry price-point wines in supermarkets would be hardest hit by price hikes caused by poor harvests.
Wine supplier Brand Phoenix, which works with International Wine & Spirit Research analysts, predicted that the off-trade market would fall from 91 million nine-litre cases to around 80 million - or 13% - by 2015. Typical annual UK wine consumption could slump from 24.5 litres per head to 22 litres, added the First Cape owner.
Accolade Wines general manager Paul Schaafsma said the duty escalator was crippling the drinks industry. “If the government is serious about driving growth - not decline - this area of tax policy requires a re-think,” he added.
Experts pointed the finger at the erosion of the sub-£5 price point for 75cl bottles by rising costs and duty. Coupled with growing interest in other drinks such as flavoured ciders, it was driving down wine consumption, they said.
Although smaller formats such as 50cl would help to maintain price points, they would contribute to the decline in overall volume, added Brand Phoenix.
Some industry observers were more optimistic, however. “I understand the impact harvests may have on volumes and retail prices but we must consider other factors,” said Morrisons BWS category director Steve Mosey. “For example, minimum unit pricing could make wine a more attractive category relative to other alcohol and wine is still the alcohol of choice for couples.”
Mintel also painted a slightly more positive picture, but projected a 9.2% fall in the overall UK wine market by 2017.