Blog: Will the bubble burst?
Olly Wehring | 21 March 2007
The drinks industry, like much of the UK, has today (21 March) given a mixed reaction to the country's latest Budget.
Distillers raised a glass to the decision from Chancellor Gordon Brown to freeze duty on spirits. Their cousins in the beer and cider industries, meanwhile, saw tax on their products linked to inflation.
However, the picture for the UK wine trade, already working in tough industry conditions, was far from rosy. Duty on still wine rose by 5p (US$0.10) - in line with inflation - but the tax on sparkling wine has increased by 7p.
Jeremy Beadles, chief executive for the UK's Wine and Spirit Trade Association, was seething at the news.
Beadles told just-drinks that the discrepancy between still and sparkling wine had its origins in the time when the UK was at war with Napoleon and had no place in today's economy.
However, Beadles painted a gloomy picture for the outlook of the sparkling wine sector in the UK. He said the hike in duty on sparkling wine would hit the bottom line of suppliers.
"The UK will be a much less attractive market to supply into," Beadles said. "With declining margins and profits, suppliers are likely to stock elsewhere, which would lead to reduced choice and quality for consumers."
Whether the Champenois and others hit by the higher duty on fizz will scale back their business in the UK is debatable.
Nevertheless, will the tax hike burst the bubble of what has been one of the UK wine industry's more buoyant categories?
The UK wine industry is renowned for being driven by fierce price competition, particularly in the off-trade. How easy will it be for producers to pass on an increase in duty to fickle consumers, who are always on the look-out for the best deal?
We want to hear your thoughts.
For those people looking to the Red Planet as shining utopia away from all things earth, look away now....
Bacardi's 42 Below vodka brand has found a novel way to use the lemons left over from cocktail-making: Turn them into liquid soap....
Philadelphia’s soda tax came into force on Sunday, and is reportedly causing a stir in the city's check-out aisles....
Earlier this month, I was most-kindly invited by Accolade Wines to visit the Royal Albert Hall in London. The reason? They wanted to see a tennis great in action, and then give them a guided tour thro...
- Have spirits companies forgotten the mainstream?
- Does alcohol accelerate the onset of dementia?
- Pernod's mood darkens over India - Analysis
- Why Scotch must drop the 'malts good, blends bad'
- Ashwagandha - The next functional drinks trend?
- Moet Hennessy unaffected by LVMH Dior buy
- Diageo to cut 105 jobs in Scotland, 50 in Italy
- Distell acquires majority stake in Cruz Vodka
- Portman Group heads to Tesco for new chief exec
- William Grant names Europe & NA Travel Retail head
- Global Scotch insights - market forecasts, product innovation and consumer trends
- Global Champagne and sparkling wine insights - market forecasts, product innovation and consumer trends
- Battle of the Generations - The fight for iGen, Millennial, Gen X and Baby Boomer consumers
- Myanmar - ISA Country Report
- Global vodka insights - market forecasts, product innovation and consumer trends