UK: Downbeat 2009 forecast for UK wine market - research

A wave of pessimism has broken over the UK wine market, according to the results of a recent survey.

The survey, conducted by just-drinks for the London International Wine Fair, which questioned 50 of the top executives from the UK wine industry, found that 30% of respondents said they were pessimistic about the prospects for the wine market in the UK over the next 12 months.

The survey went to retailers, buyers, producers and merchants.

Only 37% said they were optimistic, down from 63% a year earlier.

"To be optimistic would be to ignore reality," said Symington Family Estates' joint MD Paul Symington. "The UK wine market is exceptionally difficult due to the major recession, compounded by a very serious currency collapse." To maintain volumes, Symington argued, European producers in particular will need to lower prices or promote heavily, sacrificing any hope of margin in the process.

Jonathan Butt, of wine retailer Thresher's, added: "The continuing battle ground fought by the multiples in the alcohol category is another depressing reality, especially the blood bath that appears every Christmas, which is totally unnecessary."

When asked what the three worst things about the UK wine market are at the moment, respondents highlighted the growing concern of excise duties and discounting in the country. Jeremy Beadles, chief executive of the Wine & Spirit Trade Association, said: "The industry has reached a tipping point and cannot afford further tax increases without cutting more jobs and investment."

Reh Kendermann's MD, Nik Schritz, added: "Supermarkets have worked hard during the last 20 years to make wine affordable and accessible to general consumers. Increased pricing as a result of duty increases - especially during a recession - will turn wine back in to an elitist drink, only affordable for the most affluent consumer groups."

Of the wine-producing countries expected to make the greatest impression in the UK over the coming year, South Africa was mentioned by 45% of respondents, ahead of New Zealand, mentioned by 24%.

The survey forms part of just-drinks' 'Little Yellow Book 2009', available free at the publication's stand (G18) at LIWF this week