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Published:  23 July, 2008

After years of uninterrupted growth, the on-trade wine sector has slipped into decline. The latest figures from AC Nielsen (December/January bi-months) show that the volume of wine drunk in the UK's pubs, bars, hotels and restaurants has fallen by 6% in the past year (MAT to the end of January).

Although wine is not alone in seeing sales fall in the on-trade (with only cider, soft drinks, vodka and imported whiskey in growth), wine's decline in sales is double that of the total on-trade liquor market (-3%).

Andrea Ruggeri, group director of purchasing for Constellation Europe (which owns on-trade giant Matthew Clark), ascribed the decline to people having less money' to spend on going out and the negative media coverage of city-centre binge drinking, which were convincing people to stay at home or drink less.

The majority of the fall is due to decreasing sales in the restricted' outlets (which include small restaurants) and in hotels, where sales fell 9% and 13% respectively. The situation in pubs, however, was the opposite, with sales rising 3% in leased/tenanted pubs and 6% in managed pub chains.

Hew Dalrymple, director of wine at WaverleyTBS, said that we have been puzzled by this as our sales are showing growth'. As well as pointing out that gathering data in the on-trade is intrinsically harder than in the off-trade, he said that possible reasons were a general slowdown in high street spending' and year-on-year duty increases raising prices'. He added: I also think the wet summer had a big impact. If you look at the bi-month splits it was late summer where we really suffered compared to a year previously, whereas sales in December and January were actually 1% up. 'Overall, sales dropped fastest in the Yorkshire (-17%) and London television regions (-10%), with the Central region the only one showing growth (+3%). Fortified wines suffered even more than light wines. According to Nielsen, sales of Sherry fell 15% in the period, while Port saw a 11% decline.

The biggest falls of all were experienced by the ready-to-drink sector, which saw sales fall 18%.