UK alcohol price hikes more than double inflation

The price of wine and spirits in the UK has risen by more than twice the level of inflation during the last year, according to a new report by the Wine & Spirit Trade Association.

With UK inflation for the year to the end of April 2012 standing at 3%, the WSTA Market Report found that consumers are paying 6.5% more for wine and spirits than a year ago, with a corresponding decline in volume sales.

Both the UK on- and off-trade experienced volume declines across all alcohol categories, although off-trade wine sales at higher price points saw significant growth.

While overall wine volumes in the off-trade fell by 3% in the last 12 months and spirit sales were down by 2%, sales of wine above £10 increased by 32%. The £7-8 price bracket for wine also saw considerable volume growth of 30%.

As the average price increased across all alcohol categories in the off-trade, liqueurs was the only spirits category to show a decline in value.

In the on-trade, wine volume sales saw a more marked decline of 8%, with sales of Champagne falling by 13% in contrast to a sparkling wine uplift of 2%.

Spirits put in a stronger on-trade performance, with volumes falling by a more modest 1%. This decline was cushioned by the fact that sales of malt whisky in this sector grew by 31%, a performance which complemented the record breaking export figures enjoyed by Scotch whisky last year.

Commenting on the report’s findings, WSTA interim chief executive Gavin Partington said: “The above inflation increase in the prices of wines and spirits comes as consumers are feeling the pinch and being forced to cut back so it’s perhaps not surprising that volume sales overall are depressed.

“But there are encouraging signs elsewhere with wine at higher price points showing strong growth over the year.”