A Christmas surge helped E&J Gallo's UK grow its core wine portfolio by 0.4% in volume and 2.4% in value last year, but pressure is growing from tax rises and recession. 

Gallo said today (20 February) that UK off-trade sales in its core portfolio, including Gallo Family Vineyards, McWilliams and Barefoot, rose by 0.4% to around 5.3m nine-litre cases in 2008.

The California-based, privately held wine firm said that it was boosted by a 13% sales rise in the final four weeks of the year.

Australian brands McWilliams and Barefoot performed relative strongly, up 6.4% and 54% respectively in volume for the year. Value sales of McWilliams rose slightly slower, at 6.1%, while Barefoot increased by nearly 62% in value.

Rose wine sales also performed well in 2008, with Gallo reporting a rise of 13.5% in off-trade volumes for the year.  

Gallo's 2008 trading statement comes a month after a company spokesperson told just-drinks that it was considering cutting up to 50 jobs in the UK. The group has opened a consultation with employees. 

"Largely driving this action is the 17% increase in duty tax last year," said the spokesperson.   

Anxiety is growing in the wine sector over how many other firms and merchants may be forced to follow suit. In December, Gallo rival Constellation also announced plans to cut 50 jobs in the UK, blaming duty tax rises and a market slowdown.

Industry figures, seen by just-drinks, suggest wine volumes have fallen flat in recent months, despite low single-digit rises in value sales.

Pernod Ricard said that its Jacob's Creek and Montana wine brands suffered "slight" and "modest" volume declines in the UK in the six months ended 31 December.

Pernod Ricard told just-drinks this week that it currently has no plans to cut jobs in the UK.