In the last three months of 2016 an averaged priced bottle of wine sold in the UK passed the £5.50 mark, for the first time ever, and today our latest data shows it has now hit £5.56.
The impact of Brexit, which saw the value of the pound plummet and push up the cost of imports leading to rising inflation, has led to a 3% increase on wine prices in 12 weeks to the beginning of 2017. Showing a significant price growth compared to just 1% increase over the previous two years – 2015 to 2017.
For UK wine lovers there is worse news to come as these figures do not take into account the impact of the painful 3.9% rise on alcohol duty inflicted by the Chancellor in the March Budget – adding another 8p to the average priced bottle of wine.
In October last year the WSTA warned wine drinkers that in the space of a year they should expect wine coming into the UK from the EU to go up an average of 29p a bottle as a result of Brexit.
The WSTA Market Report Q2 2017 (in the 12 weeks to 25th of March), released today, shows the average priced bottle of wine is up 19p a bottle compared to £5.37 during the same 12 weeks of 2015 and up 16p from £5.40 during the same period in 2016.
Forecasts predict that wine prices will continue to rise as the triple whammy effect of Brexit inflation and duty increases take their toll.
Following the EU Referendum in 2016 the UK wine industry has done its best to absorb rising import costs, but as predicted it was only a matter of time before any cushioning against the effects of a weaker pound ran out and costs were passed on to the consumer.
Miles Beale Chief Executive of the Wine and Spirit Trade Association said:
“Last year the WSTA predicted that Brexit and the fall in the value of the pound, compounded by rising inflation, would force the UK wine industry to up their prices. Sadly this is now a reality as an average priced bottle of wine in the UK is at an all-time high. Unfortunately, for both British businesses and consumers, we are clear that this is not a one off adjustment, but rather that wine prices will continue to rise. What is even more concerning is that this does not take into account the inflationary duty rise – at a painful 3.9% – on alcohol inflicted by the Chancellor in the March Budget. We all know that Brexit will be complicated, but something has got to give and government must start showing its support for the UK wine industry and the 275, 000 jobs that our industry supports by tackling our excessive duty rates at the Autumn Budget.”
56% of the money Brits pay for a bottle of wine, the equivalent to £2.16, goes on wine duty. It is even more for a bottle of sparkling wine at £2.77.
Fourteen countries in the EU have zero rates for wine and therefore only 21% of a bottle of wine sold in France or Spain is taken up in tax and 19% in Germany.
The UK is at the centre of the global wine trade accounting nearly 15% per cent of the world’s wine imports. The UK is the 2nd largest trader by volume (behind Germany) and by value (behind USA), cementing its role as a key international player.
The UK wine industry employs 172,000 people directly and a further 105,000 indirectly in the supply chain.
It generates £9.5bn to the Exchequer including £4bn in duty and contributes to the public purse more money than any other alcohol category.