Life looking up for wine sales
Published:  13 July, 2007

The UK wine market grew 4 per cent in the year to May after last year's plateau, and wine prices are rising following years of near stagnation, OLN's Wine Report 2007 has revealed.

Off-trade wine sales grew to £4,428 million in the year to May 19 , according to Nielsen. Supermarkets - nearly 70 per cent of the market - grew sales by 5 per cent. In co-ops and independents - 20.1 per cent of the sector - sales rose 9 per cent.

Only the specialist chains, now just 11.2 per cent of the market and dominated by Thresher, are still suffering . Their sales dropped 7 per cent in the past year, but their average price point managed a modest 3p rise to £4.74, in the year to May - after a plunge from £5.01 in 2004.

Supermarkets made the biggest hike - their average bottle price rose 12p to £3.81 - and across the off-trade the average price rose 10p to £3.97, more than double any increase in the past two years.

Wine suppliers are keen to move away from rigid 99p and 49p price points, and to see duty increases passed on to consumers. Fifty-nine per cent of distributors questioned in OLN's annual survey want to move to a more free-floating system.

Hatch Mansfield marketing director Lynn Murray said: "Moving away from such rigid price points would really help the trade pass on duty increases to consumers and give retailers and suppliers the opportunity to invest in the actual product and provide a much healthier trading environment."

Suppliers now need to win over retailers to their enthusiasm - many of them still believe the 99p and 49p points are key triggers for consumers.

Other findings:

Hardys is still the top brand in the UK off-trade and in supermarkets, but Blossom Hill has lost ground for the first time

Chile has overtaken Spain to become the sixth most popular wine-producing country in the off-trade, and Australia still takes the crown

Eighty-one per cent of wine suppliers think the rosť market is going to grow and grow

Screwcap is the closure of the future - it now closes 31 per cent of wines and 71 per cent of distributors expect to see more of it

Innovation and less deep discounting are what the market needs to get back into serious growth, say suppliers.

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