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Tax hikes blamed for wine sales fall

Published:  13 December, 2011

Tax increases are mainly responsible for the drop in wine sales volumes - which has accelerated in the last quarter, falling by 4% - according to the WSTA's market report.

Tax increases are mainly responsible for the drop in wine sales volumes - which has accelerated in the last quarter, falling by 4% - according to the WSTA's market report.


The figures show sales of wine down 3% by volume in the 12 months to 26 November and down 4% over the last quarter. Shop sales of wine by value are up 3% for the year but analysis shows this is mostly down to the combined impact of increases in excise duty and VAT.



Elsewhere in the off-trade cider (+3% volume, +11% value) and sparkling wine (+2% volume, +7% value) showed strong growth figures, while gin (+3% volume, +9% value) and vodka (+3% volume, +10% value) also performed well.



In the on-trade most categories saw volumes decline in the year to October 1, yet all except RTDs saw some increase in value, though this was again partly driven by the impact of duty and VAT increases.


While wine sales for the year were down 6% in volume, sales value increased by 9%. Sparkling wines saw volumes up by 2% and value up by 8%.


While on-trade spirits volumes were down overall, liqueurs (+5% volume, +10% value) and tequila (+6% volume, +12% value) emerged as the strongest performers.


WSTA chief executive Jeremy Beadles said: "All the signs point to consumers cutting back on spending and any growth in value is largely down to the impact of this year's tax increases.


"While some categories, including sparkling wine, are bucking the trend, the prospect of a further above inflation tax increase in March, amid gloomy economic forecasts, offers little joy for consumers or the trade."



The WSTA's market report uses data from Nielsen and CGA Strategy, with analysis by Tim Wilson, author of the Wilson Drinks Report.

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