My View: Price hikes to breath 'new life' into wine sector

Published: 18 January, 2007

Fuelled mainly by Australia, the south of France and northern Italy, we are about to be clobbered by an unprecedented wave of "wine cost" inflation in 2008.

Whether justified or not, it is precisely the breadth and scale of increases which, I believe, represent a massive opportunity for our industry, although my enthusiasm is tempered by the backdrop of macro-economic uncertainty affecting us all currently.

If Mr Darling does decide to put a further 25-30p on wine duty in March, the rise will be passed on to consumers, unlike previous years. With most grunt-level wine costs set to rise, we could see the current average retail sale price of circa 3.86 rise to nearer 4.49, virtually overnight.

Potential rises of 50p per bottle in the off-trade and 1 per bottle in the on-trade, would reduce the size of the step consumers currently have to take between 'grunt' and

premium wines.

Reducing this gap will provide further fuel to the growth already evident in premium and super-premium wine and encourage trading up.

But producers must resist pressure to stretch wine quality. If consumers are going to swallow price rises, every wine must deliver in the glass. If enough of us align ourselves behind a "quality first" ethos, the price hikes will breathe some much-need oxygen into our sector and also further expose the dullards who continue to peddle the poor quality wines which are the bane of our industry!

Neil Bruce is wine category director at Waverley TBS

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