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Rise in alcohol prices contributes to a jump in inflation in the UK

Published:  17 August, 2016

The Office of National Statistics most recent figures released yesterday, saw inflation rise to its highest level in nearly two years to 0.6%.

Despite the rise in inflation, the new figure is still relatively low, but it is the highest level since November 2014.  "The main contributors to the increase in the rate were rising prices for motor fuels, alcoholic beverages and accommodation services, and a smaller fall in food prices than a year ago," stated the report released with the figures by the ONS.

With the sterling yet to recover from its post-Brexit dip, more price increases for alcohol in particular are expected to come this autumn.

Andrew Bewes of Halligarten Druitt told in an interview last month:  "We, as I suspect most of our competitors, have covered for a certain period of time. But to be frank we thought that we might remain in the EU and things would get better or at least settle down a bit. As an industry we have been a bit caught out and unless something changes in the next six to eight weeks, we will have to put prices up."

Nik Darlington of the Red squirrel said: "I agree prices will go up and we're communicating with our customers now for a few of our wines that we have had to raise prices on.  But when you have currencies fluctuating, like you do in the wine trade, it is to be expected. Currency levels for the sterling compared to the euro are where they were three years ago. This is what happens with imports and exports."

Darlington did say while he had planned for some fluctuations for a period of time, he too had to raise prices on a few of his wines.

What Darlington warned against was being quick to blame this on Brexit and said it would be "disappointing". He points out that while the Sterling has dropped so has the euro so for many European wines coming over, while there have been some fluctuations it is not nearly as severe for those that are impressing from australasia or the US for example.

"With premium Australian wine just on the cusp of reawakening- this is big hit. The sterling is now 20% weaker, which is massive and unfortunate.  My hope is that enough people have had a snap shot at just how good premium Australia is and they will still give it go."