Has the UK wine market lost its shine?

Has the UK wine market lost its shine?

The UK needs to find new ways of distributing wealth in the wine sector if it is to continue as a key market for the industry's major players, according to the chief of Vinexpo.

It is becoming harder for wine firms to make money in the UK, said Robert Beynat, head of the world's largest wine exhibition, Vinexpo.

The UK needs to "invest in new ways of distributing wine," Beynat told journalists at a briefing in London yesterday (21 January) for this year's Vinexpo Asia-Pacific expo in Hong Kong. "Everybody has to make money," he said. 

His comments follow questioning from just-drinks on whether more international wine firms will switch resources from the UK to faster growing Asian markets.

A cocktail of regulatory pressure, duty tax rises, high retailer profit margins, intense price competition and unfavourable exchange rates have caused concern that the UK is no longer so attractive to wine firms.

Beynat highlighted the fact that both E&J Gallo and Constellation Europe reduced staff numbers in the UK in 2009.

But, he added that "in terms of volume, the UK remains very important" and that knowledge of wine is strong in the UK.

He said that more could be done to improve retailing of premium wines. "Probably specialist shops will be part of the future," he said, citing the chains of boutique wine stores operating in Canada as an example.

Multiple retailers account for more than three quarters of UK wine sales by volume, with the vast majority sold on discount.

Demand for wine in Asia-Pacific is set to far outstrip that in the UK and US over the next three years, according to Vinexpo and IWSR research published yesterday. Still, per capita consumption in the UK is 23 litres, compared to 3.3 litres in Hong Kong - the highest wine consumer per head in Asia-Pacific.