Subscriber login Close [x]
remember me
You are not logged in.

How the “crazy” state of Prosecco’s 23p price erosion could be about to change

Published:  17 October, 2017

The media last week widely reported that the average price for a bottle of Prosecco has fallen a further 23p over past year as competition drives down prices.

But reports directly from the region suggest that a major turn around could be in store as a depleted harvest and other factors could begin to reverse the bargain price situation.

Prosecco grew 8.8% in the off-trade in the year to 18 June 2017 (IRI) and growth is similar in the on-trade.

Equally, the Prosecco market as a whole has grown exponentially over the past five years, with Kantar putting the number of Prosecco shoppers at 8.5million last year, up from 2.4million in 2012.

And yet, retail prices continue to fall, with figures from IRI putting the average bottle price in 2017 at 22p lower than last year.

Note: IRI has confirmed the actual figure is 22p for Prosecco - not the 23p quoted in the media.

However, the average price for the entire sparkling caterory has fallen by 23p, showing dramatic price erosion on the category as a whole. 

Connoisseur Estates managing director Andrew Steel, calls this situation “crazy” - especially in regards to Prosecco, which is already at maxium output. 

Steel, who has several large contacts with Prosecco producers in the Veneto region, said that situation isn’t sustainable in the long-term because of Prosecco’s finite resources as a DOC area, but also that various pressures could see prices rising by as much as 10% by January.

In conversation with Harpers, he said: “The harvest has been dire. Producers across the region are down by about 30%. The exchange rate in the UK is bad, duty is rising, and yet retailers are still crashing and burning on prices.”

Prosecco became a DOC around eight years ago when, among other stipulations, production was limited geographically to the Veneto region.

But despite growing on every spare piece of land to keep up with growing demand, prices have been steadily eroded in the UK, led predominantly by the discounters who have been selling Prosecco at a loss in order to drive footfall.

Other FMCG categories have benefited – but Prosecco isn’t one.

“Lidl was seling a case for £20,” said Steel, speaking of the August bank holiday deal which saw Prosecco retail for £3.33 a bottle.

“The duty alone is about £16, add to that VAT, and that’s £20, which means there’s no cost on the wine.

“What’s madness is that Prosecco production is a finite area, like Champagne, and it’s popular. Retailers should be aiming for a profit rather than at a loss to get customers through the doors. The Prosecco producers I speak to just don’t understand it.”

Signs suggest however that the of zero-margin Prosecco could be coming to an end.

According to Steel, negotations for the first Prosecco shipments since the harvest have seen ex-cellar pricing rise by 33% over the past three weeks alone from €1.70 to €2.30 a litre.

Steel believes this will force the price of finished goods in the UK up by 10%.

He calls for discussion going forward: “We need to talk about where Prosecco is going to go in next two to three years. It’s going to become a commodity and therefore should be turning a profit. Retailers selling it as a loss-leader is going to the product no good at all.”


Value: up 17.6% to ££579.2m

Volume: up 18.3%

Average price per bottle: down to £7 from £7.04


Value: up 60.6% to £297.5m

Volume: up 63.8%

Average price per 175ml glass: down to £5.63 from £5.74