'British' wine hits the spot for budget shoppers

However, UK wine producers says there is still widespread confusion among customers about the difference between this "British" wine and "English wine", which is made from grapes grown on these shores. British wine is fermented and bottled in the UK from imported grape juice.

According to a report in the Grocer magazine, this means British wine has not been hit as hard by currency fluctuations as imported wines. It can be found for as little as 2.99 a bottle, or two for 5, and total sales have grown more than 50 per cent in the past year. The market in British wine is now worth 23 million a year, although even when combined with low-alcohol versions it still accounts for only 1.6 per cent of off-sales.

The firm CWF has said its British wine brand Silver Bay Point has seen volume sales rise more than six-fold year-on-year.

Paul Shelton of wine importer PLB said rising prices among imported wine at the bottom end of the price scale meant the industry risked losing price- sensitive wine consumers to other drink categories.

He said: "The introduction of British-made wine has directly substituted the sub-3 wine category with what appears to the consumer as a generic new world wine."