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| 15 December, 2018
The Wine and Spirit Trade Association is warning consumers to brace themselves for wine price rises as businesses take a huge inflationary hit following the Budget announcement.
Following Brexit’s impact on the pound combined with inflation the wine trade is already facing a tough trading landscape.
As a result of the 3.1% inflationary rises on alcohol imposed by the Philip Hammond, wine businesses and consumers will bear the brunt of the tax hike a month before Brexit.
The duty rises by inflation will mean a bottle of wine will go up by 7p, sparkling wine 9p and an average priced bottle of fortified wine will also go up 9p. This does not include VAT which would add a further 20% to the wine duty rise.
Based on volumes of wine sales over the last 12 months, from February next year UK consumers of wine and sparkling wine will be hit with an extra £90 million bill.
An average priced bottle of spirits will remain the same following a welcome freeze to spirit duty.
Hammond has made himself an unpopular Chancellor with the wine trade and wine drinkers after singling them out for a rise and freezing duty to all other alcohol products. The Chancellor also put up wine duty in the Spring Budget last year.
Commenting on the Chancellor’s decision to freeze duty on spirits and raise wine duty by inflation, Miles Beale Chief Executive of the Wine & Spirit Trade Association said:
Gin sales in the UK have reached another record-breaking high helped by this summer’s heatwave, world cup fever and by Millennials discovering their love for new pink and flavoured gins.
The Wine and Spirit Trade Association’s end of year market report shows a massive boost in gin sales over the summer taking the total sales value to over £1.9 billion.
Over 66 million bottles of gin were sold in the UK in 12 months, up 41% and over 19 million more bottles than the same period last year.
More gin was sold during three months of the 2018 heatwave, when the equivalent of almost 28 million bottles were bought, than the summers of 2014 and 2015 combined, which saw almost 27 million bottles sold over the two summers.
This quarter saw gin grow 53% by volume and 59% by value, compared to the same period in 2017, the largest growth by quarter on record for gin and the first time a spirit has seen growth of over 50%.
And it was in Britain’s pubs, bars and restaurants that gin saw the largest growth in value sales where for the first time in a 12 month period sales passed £1 billion, with over 56% more gin sold than last year.
So many gins were served over the bar, in the last recorded 12 months, the gin category has jumped two places in the spirits leader board. It is now the second most popular drink sold in the on-trade, behind vodka, overtaking whiskies and liqueurs for the first time.
A huge part of the gin surge, this year, has been down to sales of pink and flavoured gin as Britain has seen hundreds of new products coming onto the market.
The latest data shows that flavoured gin has driven over half of all growth in gin in the last recorded 12 months, despite only making up one fifth of total sales. Almost three quarters of the flavoured contribution to gin’s growth has been driven by pink gin.
Flavoured gin alone brought in £165 million during this time up a whopping 751% on the same period last year.
Research has shown that the explosion in the flavoured and pink gin category comes down to its appeal to consumers under 45.
The category is expected to continue to grow in 2019 as brands are set to launch new flavoured and pink gins on to market.
According to HMRC we exported £532 million worth British gin this year which is expected to grow even more in 2019 adding to the value of the gin category.
Miles Beale Chief Executive of the Wine and Spirit Trade Association said:
“Gin is once again breaking records helped by our innovative distillers who have introduced an exciting array of new flavoured, pink and more traditional gins this year. The popular new products combined with a fantastic long hot summer and the excitement of the World Cup has helped boost the category beyond all predictions. It was only a few months ago that we announced that gin sales at home and abroad had broken the £2 billion mark. Our latest Market Report shows that sales of gin in the UK alone is just shy of the £2 billion. It seems we may have been a bit premature hailing 2016 to be the ‘Year of Gin’. Just two years later we’ve almost doubled sales of gin. 2019 will have to be crowned the year when gin was in the pink.”
Warren Scott, CEO and Co-Founder of Quintessential Brands, one of the largest suppliers of gin in the UK and International Spirits Challenge Gin Distiller of the Year 2018, comments:
“It’s fantastic to see the nation’s love affair with British Gin continuing as the category diversifies. Right now, we’re seeing more interest and engagement in gin than ever from consumers – those who are new to the category as well as those more seasoned gin drinkers who want to experiment with flavoured gins or splash out on more premium gins.
“As owners of the UK’s foremost gin distillery – G&J Distillers in Cheshire – our expert distillers bring a lifetime of experience and skill to creating new and exciting gins that consumers can enjoy at home or out on the town; the recent success of premium gin brands with an innovative twist, such as BLOOM Gin – with its Jasmine & Rose Pink Gin, which flew off the shelves when we launched it this summer – shows that consumers are intrigued by these new gin flavours which can only be good news for the UK’s gin producers and the long term health of the category.
“Whilst such innovation is key to driving interest in British gin, it’s important to recognise the longstanding gin heritage we have in this country and the enduring popularity of classic gins. Whilst the last year has seen a huge surge of interest in new styles and flavours of gin, the majority of gins that we’re drinking today are actually based on a style dating back to 1761, when the Original London Dry Gin was created by an enterprising young man named Thomas Dakin. That very same gin, Greenall’s, is still produced in exactly the same way by G&J Distillers, and it remains one of the best-selling gins in the world today.
“The run-up to Christmas has been busier than ever as we pull out all the stops to meet demand for the festive season. It’s certainly a golden era for British Gin right now and I’m confident this success will continue in the years ahead.”