• 62% say wine industry still in recession
  • 48% are optimistic over future prospects
  • 56% believe UK still most important wine market
The wine industry in the UK is still in recession, according to our survey

The wine industry in the UK is still in recession, according to our survey

The majority of the UK wine trade still believes that the industry is in recession, but optimism levels have increased over last year as the sector comes to grips with a new business landscape, a survey conducted for just-drinks has found.

The fourth annual State of the Nation UK wine survey, sent to 50 key decision makers in the UK wine trade and a select band of just-drinks' wine audience, found that 62% of the trade believed the wine market was still in recession. Only 11% of respondents said they thought it was out of recession.

When asked whether one was optimistic or pessimistic about the prospects for the UK wine market over the next 12 months, 48% answered that they were, up from 37% last year. Only 28% said they were pessimistic, down on 30% last year.

"Perhaps it is surprising to see an increase in levels of optimism," said Richard Woodard who lead the survey, "although entirely positive responses were relatively few and far between."

He continued: "Most people recorded concerns over a number of factors, including pricing levels at multiple retailers, increasing excise duty and the generally fragile recovery in consumer spending. But many also exhibited a 'keep calm and carry on' attitude, embodied by a determination to adopt a proactive approach, dealing with the realities of today's wine market, confronting the challenges and making the most of opportunities."
 
When asked what the most important issue facing the UK wine market in 2010 is, 32% of respondents said duty increases, up from 24% last year. Some 25% said retail pricing and margin erosion, down from 27% in 2009. The UK economy and consumers' disposable incomes each polled 19%.
 
"Less tangibly," said Woodard, "there is a growing concern among respondents about the ongoing status and image of wine in British society. Rising duty, commoditisation, scare stories over binge drinking and retail consolidation - all are perceived as shunting wine into an FMCG corner, rather than a more premium, quality orientated product."
 
Despite all of this, there was a rise in the percentage of those who felt the UK remains the most "important and dynamic market in the world". Some 56% said it still was, up from 42% last year and the most positive response in three years. A third answered that it wasn't - also up on 30% last year, with a big fall from those sitting on the fence to 11% from 28% last year.
 
Woodard said: "In reality, few "yes" answers were entirely positive, and most were followed with several "buts" and "howevers". The distinction for many is between the size and diversity of the UK wine market - few would deny that this is a continuing strength - and the conditions under which it operates.
 
"The global economic downturn may have affected business in markets like the US in the short term, but as recovery continues, companies are likely to look once again at potentially more attractive export destinations in the Americas and Asia, plus Eastern Europe."