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UK wine, spirits sales fall as consumers cut costs: WSTA

DBR Staff Writer Published 18 March 2013

Alcohol volume sales in the UK have fallen by 3% in the off-trade and 4% in the on-trade in 2012 driven by year-on-year alcohol duty rises, according to a market report by UK-based organization for the wine and spirit industry Wine & Spirit Trade Association (WSTA).

If the Alcohol Duty Escalator carries on at the current rate till 2015, duty on wine and spirits will have increased by 50% and 44%, respectively, since 2008. This rise in alcohol duty has forced consumers to cut back their spending on alcohol in the country.

Though the alcohol volume sales have dropped, the prices have gone up by 2% in the off-trade and 3% in the on-trade, primarily helped by tax increase of over 5% in 2012.

In the off-trade markets, sparkling wine reported highest volume growth of 8% over the last 12 months, mainly due to fall in Champagne sales and consumers looking for cheap wines, whereas in the on-trade markets, liqueurs reported highest volume growth of 13% in 2012.

WSTA chief executive Miles Beale said the latest market report shows that consumers are continuing to cut their spending on alcohol, which resulted in sales falling in both the on- and off-trade.

"While it had been hoped that Christmas would provide a small boost for the industry these figures show that there was subdued festive cheer over the Christmas period," Beale added.

"This is a further sign that the Government needs to think again before increasing prices through the unpopular duty escalator, which risks damaging jobs and growth."