Chris Mercer

Beer sales run dry in the UK

By: Chris Mercer - 26 October 2010 14:59

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UK beer sales are odds-on to show a further drop in 2010 following the worst quarterly decline on record.

Beer sales shrunk by a tenth in volume for the third quarter of this year, to the end of September, versus the same period of 2009. It's the biggest quarterly fall in records published by the British Beer & Pub Association, which date back to 1997.

Discount deals may have boosted volumes during the FIFA World Cup, but sales for 2010 now look to be heading the way of England's football flops. After dusting off the just-drinks calculator, we estimate that pubs and retailers would have to sell 8.321m barrels of beer in the fourth quarter for the industry to break even against 2009.

Although normally a decent period, generally due to Christmas-related promotions, the sector has not broken the 8m barrels barrier in a fourth quarter since 2007.

We can expect the rate of decay to soften in the fourth quarter of this year, even if only because the industry is facing an easier comparison with '09. But, consumer spending power remains under pressure, which may well exacerbate the long-term trend of decline.

That said, all headline figures mask individual successes and nightmares and the BBPA volume sales report is no exception. For example, cask ale sales volumes held steady in 2009 despite a 4% drop in the UK beer market overall.

There is also growing evidence that consumers are prepared to fish into their pockets for a bottle of high-end lager. SABMiller, which sells Peroni Nastro Azzurro in the UK, said in September that the group's volume sales in the country were rising 20% year-on-year, albeit from a very small base.

UK brewer Shepherd Neame, a million miles from the multinational reach of SABMiller, reported a 12% rise in volume sales of bottled beer for the 12 months to 26 June.

The beer sector is in decline, then, but there is clearly still consumer interest in the category.

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Beer sales run dry in the UK

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