Wine drinkers invest in the best despite economy

Picture: Phil Wilkinson
Picture: Phil Wilkinson
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British wine-drinkers are surviving the economic crisis by turning to ever more expensive bottles of wine, confounding expectations that tough times would boost sales of cheap alcohol.

A study on spending has shown that despite the economic gloom, wine lovers are refusing to compromise on their choice of tipple.

Figures from market analysts Nielsen, said sales of wine priced £7.01 and over has grown 16 per cent in the past year .

The study also shows that sales of more expensive brands of vodka, gin and beer have also increased.

Helen Stares, Nielsen’s client business partner, said that, although the combined impact of duty and VAT had pushed up the average price of wine, some consumers were buying into higher bands.

She said: “People are buying less, but we are seeing that, when consumers do buy, they are purchasing at a better quality – so higher prices.

“There is, of course, an element of taxation driving up prices, but we’re seeing premium products grow in other areas too – vodka, gin, world beer – and this trend can also be seen outside beer, wine and spirits, such as in coffee.

Ms Stares added: Where we’re seeing the really strong growth is in more expensive wines – £7 and above – so to some extent bypassing the lower end of the market.

“With the £5 price threshold being crossed, we would expect to see volume fall, but whether or not it’s a doomsday scenario very much differs by retailer and wine producer.

“They may be selling less, but if it’s at a more profitable price then this is surely good news.”

She added that, despite the tough conditions and a fresh round of duty increases in last month’s Budget, consumers were still buying wine, albeit it with greater caution.

Ms Stares said: “We haven’t really seen a decline in the number of households buying wine over the start of the year – no more so than we would expect coming out of the Christmas period.

“We believe that just as many consumers are purchasing wine, but they are buying less of it, and again this is similar to what we would expect in the early part of any year.”

In terms of the top countries exporting to the UK, Australia has extended its lead ahead of second-placed Italy, having clawed back some of the ground it lost in recent years.

Although Australia’s value growth was flat, sales hit the £1 billion mark against Italy’s £830 million following a 5 per cent drop on last year.

France and the US remained in third and fourth place with respective sales of £765m and £686m. Spain led the charge with the strongest value surge of all the top 10 countries – up 17 per cent to £538m.