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Wine trade faces consumer 'crisis'

Published:  15 September, 2010

The wine trade has been warned it faces a "crisis of engagement" with its consumer base.

At today's annual WSTA conference there were also warnings that retailers and some suppliers remain too focused on price.

Richard Halstead, chief operating officer of Wine Intelligence, said consumers "are caring less" about wine than they were three years ago, and consuming it less often.

More people now cite promotions as an important buying cue, he added, while fewer are influenced by store recommendations.

Nielsen and CGA Strategy presented some worrying figures for the off and on-trades respectively.

Nielsen's Stewart Blunt said the latest data showed a 3% increase in light wine sales in the take-home sector but a 1% decline in volumes.

Average bottle prices have risen 15p to £4.44, he added, which he said did not necessarily reflect rising duty levels. "The unfavourable exchange rates have had a far greater effect, and caused the cheaper end of the market to more or less disappear," he added.

He said the off-trade was "increasingly dependent on promotions".

Alison Powell of CGA said that 18 to 35-year-olds were visiting the on-trade less, and predicted further closures among wet-led and circuit pubs.
But she said rose wine was still in a growth phase and stealing share from drinks such as RTDs and gin.

Jonathan Stordy, Beam Global's managing director for Europe, warned that the drinks trade needed to work together to achieve sustainable profits. He claimed the UK had become the "least profitable" market in Europe and risked losing investment from multinational companies unless the environment changed.

He criticised retailers for "crashing prices at Christmas" and for conducting prolonged negotiations with suppliers which then changed at the last minute.

Home Office minister James Brokenshire also addressed the conference and stressed that the "rebalancing" of the Licensing Act was intended to empower local communities.

He praised trade efforts such as Community Alcohol Partnerships but added that flexibility was needed "to target the small minority of irresponsible operators" and to develop "the responsible drinking culture that we all want to see".