Blog: Olly WehringSpirits in the UK - trade up while prices go down?

Olly Wehring | 19 February 2007

At Diageo’s interim results last week, we managed to grab hold of the head of the company’s European operations, Andrew Morgan, for a quick one-to-one (the results of that chat will be ready exclusively for you, dear reader, tomorrow).

The UK off-trade spirits market seems to be high on the agenda, not only for Morgan, but also for Adrian McKeon, Beam UK’s MD (with whom we also have an exclusive interview coming up later this month), and Pernod Ricard UK. The latter has trumpeted its strong showing in the sector today (19 February), while highlighting how tough the market has become.

In the last eight weeks of 2006, Pernod said, the overall spirits category in the UK was down by 1% in value and by 4% in volume. While Pernod may have outperformed the market as a whole, the battle of Christmas 2007 will may drag the French group into the fray.

Morgan, meanwhile, conceded that the battlefield is getting bloodier. “We did draw something of a line in the sand in terms of what we were prepared to support with the retailers this Christmas and it cost us volume,” he told us. “We knew we’d lose some significant volumes, but as far as I’m concerned this is the right thing to do for the brands. It was negative for us but this is about the health of our brands for the long-term.”

So, is this some sort of tipping point? How do these drinks companies, so keen on ‘premiumisation’ and trading up, maintain this ethos while spirits sales - and volumes - slide in a market dictated by price? Does this not do the brands some damage? And where will this all end?


BLOG

Bad day on the beer? This'll help

If you work for a brewer and are having a rough week, take a minute to regain some perspective with this, from the good people at US craft beer producer Sierra Nevada Brewing Co....

BLOG

Brewers Association "bid" to buy Anheuser-Busch InBev strikes a chord

Is this a case of if you can't beat them, buy them?...

BLOG

Non-alcoholic beer fails the Bernstein challenge

Crazy days in the Bernstein offices. Taking time out from being one of the world’s top beverage analysts, the Bernstein team, lead by its London-based veteran Trevor Stirling, held its very own taste ...

BLOG

AG Barr launches Funkin innovation search

AG Barr has lined up a Funkin campaign in the UK to find an 'innovation champion'. ...

just-drinks homepage



Forgot your password?