Inflation drops on beers, wine and spirits

Published: 15 February, 2012

The latest inflation figures show a much-improved picture for the drinks industry, and the trend is likely to continue through 2012, according to the Wilson Drinks Report.

The impact of the January 2011 VAT increase has now been removed, and yesterday's inflation figures showed a sharp drop in inflation on beer, wine and spirits.

Spirit inflation fell from 8.4% in December 2011 to 2% in January 2012. Inflation on wine fell for the second consecutive month, down from 6% in November 2011 to 3% in January 2012.

Tim Wilson, managing director of the Wilson Drinks Report, said: "We really welcome the overall drop in inflation from 4.2% in December to 3.6% in January. For once, the news is also good for alcohol drinkers, as the rate of inflation on all types of alcoholic drink fell for the month of January.

"As we predicted last month, the impact of the January 2011 VAT increase has now flowed through into the annual inflation figures, and we expect inflation to continue to fall during 2012.

"The RPI figure is also important as the alcohol duty escalator is based on RPI + 2%. RPI fell 0.9% in January to 3.9%, and we expect the Office for Budget Responsibility to forecast RPI falling to around 3% in the second half of the year when they publish their latest estimates at the Budget next month.

"Many restaurant chains continue to provide some excellent value for money deals, which has helped keep prices down."

The quarterly Wilson Drinks Report provides analysis, insight and commentary, supported by primary consumer research from YouGov and market data from Nielsen, CGA Strategy, the IWSR and Knowledge Gaps.

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