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On-trade hit hardest as consumers rein in spending

Published:  06 March, 2012

The on-trade is being hit the hardest, as consumers continue to rein in their spending, according to the latest WSTA Market Report.

The WSTA Market Report draws on data and analysis from Nielsen, CGA Strategy and the Wilson Drinks Report, which shows sales of wine and spirits are continuing to fall across shops, pubs, restaurants and clubs.

On-trade sales of wine were down 6% by volume for the year to December 24, with spirits down 2%.

In the off-trade, the report says volume sales of wine were down 2% in the year to February 4, with shop sales of spirits down 1%.

Champagne volume sales were also hit, falling 6% for the year in the off trade and 12% in the on-trade with Sparkling Wine a likely beneficiary (off-trade volume sales up 7%).

While overall volumes were down for the year sales value across all alcohol categories was up 5%, driven substantially by VAT and excise duty increases.

Sales of wine at prices over £5 have grown significantly in volume and value terms over the past year, whereas Nielsen data shows off-trade sales of wine at lower price points have continued to fall as consumers are drawn to other categories including cider (up 4% by volume for the year and 13% by value) and British Wine (up 51% by volume).

- In the spirits category gin and vodka stand out as the best off trade performers over the year, with volume sales up 2% and 3% respectively.

Malt whisky has fared particularly well, with volumes up 31% over the year and value up 48%.

WSTA interim chief executive, Gavin Partington said: "It's clear that many consumers continue to feel the pinch yet the duty escalator on alcohol continues to push prices up and sadly the Budget later this month threatens more of the same.

"If Budget tax increases go through as scheduled, tax on wine and spirits will have increased by 45% and 40% respectively since 2008. I

"It's a tax take that hurts consumers and undermines our industry's efforts to support economic growth."