It's been a split year for the UK's supermarkets.
On the one hand, the Competition Commission is investigating whether the Big Four - Tesco, Asda, Sainsbury's and Morrisons - hold too much power in the market; on the other, Somerfield is put up for sale and the same four supermarkets are rumoured to be among the potential bidders.
On the one hand, staff have been leaving drinks departments across the board; on the other, supermarkets are making real efforts to give breadth, depth and difference to their ranges.
On the one hand there is a push towards responsible drinking, with a particular focus on matching drinks with food; on the other, retailers in Scotland are bracing themselves for the issue to be taken out of their hands, with drinks aisles segregated from all other products and price promotions banned.
The Competition Commission's initial findings were that consumers are getting a good deal from supermarkets, and that below-cost selling is not damaging other parts of the drinks trade, although Tesco is in a dominant position.
But supermarkets continue to grow their share of the off-trade, and
their drinks market was worth £7.9 billion in 2007, according to Nielsen.
Of 74,042 off-licences in the UK, 6,452 are multiple grocers, compared
with 67,590 impulse outlets, according to Nielsen - that's only an 8.7 per cent share of the market.
And yet they held a 66 per cent share of off-trade alcohol sales by volume in the year to Dec
29, and grew their volume sales by 5 per cent in 2007 - while the impulse sector remained completely stagnant.
The multiple grocers have a particularly strong hold on sparkling wine, fortified wine, liqueurs and golden rum, and have significantly grown their volume sales of cider and golden rum over the past year.
Unsurprisingly, Tesco is still the biggest player. Nielsen's Homescan service, which covers only some of the multiples in this report and has yielded some controversial results in the past, found that while Tesco's share of supermarket sales by value dropped by 0.1 per cent to 33.6 per cent, its share of the same drinks market grew from 33.3 per cent in 2006 to 33.9 per cent in 2007.
That dominance is not all the result of discounts and promotions - last year Tesco carried out the biggest range review ever done by a UK supermarket, adding 300 new wine lines and delisting 70, as well as revamping its beer and spirits offerings.
The giant has won a lot of respect across the trade for its enormous range improvement under Dan Jago, and an adventurous spirit has seen even the own-label Finest range branching out into such unusual wines as Grüner Veltliner and Fiano. Tesco's average bottle price is now £4.32.
Tesco's corporate & legal affairs director Lucy Neville-Rolfe has defended the group's promotions policy: "Our research clearly shows that most of the alcohol purchased by our customers is bought as part of the weekly family shop. Significantly, our sales data also shows a fall in customers' spend on beers, wines and spirits after they have bought into a promotion - suggesting customers stock up rather than drink more," she said.
on products across all categories are extremely popular and help us deliver the great choice, value and quality customers expect of us. They give the customers the opportunity to stock up on great value products and the chance to try new brands."
The second biggest player in supermarket drinks, according to Homescan, is Sainsbury's, with a 20.6 per cent share of the market compared
with 21.2 per cent in 2006.
It's been a turbulent year for the retailer, notably because of a shake-up in its drinks buying department. Abigail Hirshfeld is the latest buyer to leave Sainsbury's team, following beer and spirits buyer Fiona Bayley's departure after being moved to a role in the detergents category.
Nevertheless, there has been plenty of innovation at Sainsbury's - fine, organic and Fairtrade wines have all come under the spotlight; it was the first of many multiples to launch an own-label over-ice cider; it has embarked on a major customer information initiative under beer buyer Chris Craig, including beers of the month and seasonal and regional lines; and it has expanded its own-label spirits offering with four new entry-level lines, pre-mixed cocktails and Taste The Difference Armagnac, Calvados and Whisky.
Customer education initiatives include a focus on food and drinks matching, with tips on shelf-edge barkers and hanging blackboards, in Try Something New leaflets and in in-store sampling sessions.
At Asda, which has 16.7 per cent of the drinks market and 17.7 per cent overall, the BWS team has been integrated into one team under category director Dave Stewart, and the group is recruiting a team of product development managers. 2008 will see a full range review, including developing its own-label range, Extra Special. Asda's average bottle price is £3.60.
Morrisons grew its drinks takings by 10.4 per cent in 2007, while overall takings grew just 0.5 per cent, according to Nielsen's Homescan.
The retailer, which has been expanding southwards beyond its northern heartland, is leading the charge on deep discounting
and has been tipped as the supermarket which kicked off last year's Christmas price war by slashing prices on Baileys, among others.
Morrisons has also seen some high-profile departures - wine trading manager Stuart Purdie left the supermarket after 16 years, shortly before licensed trades director John Spurs retired at the end of last year.
Senior spirits buyer Jane Pearson has also left, and wine buyer James Jackson has moved to a new position in the food department - leaving Arabella Woodrow MW, who joined as head of the buying team in October, to make a new start in 2008.
Insiders say a signal that the retail landscape is changing is the fact that some of the smaller operators are challenging Tesco and Asda when it comes to major price promotions.
Somerfield's drinks team seems to have gone quiet since Angela Mount, one of the highest profile buyers in the trade, left a year ago. The wine team is now headed by Claire Pell and Julie McFadden, who have reviewed the range and cut it by around 100 wines to some 370 in a bid to avoid stylistic duplication.
Like other retailers, Somerfield has put a focus on its own-label wines, and most notably rosé.
Meanwhile the business has been put up for auction by Citigroup, according to reports. A consortium including property magnate Robert Tchenguiz, Barclays Capital and the private equity group, Apax Partners, had bought the group for £1.8bn two years ago. Waitrose, Asda, Sainsbury's and Morrisons are said to be interested.
The Co-op has more than 3,200 shops across the country and plans to open 80 more food stores in 2008, after opening 55 in 2007. It
intends to rebrand all its own-label range to The Co-operative over the next 12 months.
Waitrose's reputation for working with smaller producers and concentrating on quality and the premium end of the market was boosted when it launched its own-label In Partnership With wine range, developed with existing and new suppliers. The bottles feature the name and location of the winery as well as Waitrose's In Partnership With label.
The supermarket's average bottle price is £5.85 - well above the market average.
Waitrose has reviewed its Inner Cellar and fine wine ranges, doubled its sales of English wines and opened a shop in the basement of John Lewis in Oxford Street.
Last week beer buyer Steve Wallace, during whose tenure the retailer pioneered local ales and launched its successful beer and cider showcases, left the business to return to Scotland.
Northern retailer Booths, which, like Waitrose, has a premium focus, has gone from strength to strength, notably expanding its beer and spirits ranges.
Meanwhile deep discounters Aldi, Lidl and Netto are tipped for growth in 2008 as the credit crunch continues to tighten UK shoppers' purse strings.
Highlights of 2007
The biggest range review ever carried out by a UK supermarket has to be the highlight of Tesco's year. Three hundred wines were added, 70 delisted, and the Finest own-brand range got some unusual additions. Beer and cider ranges also got an overhaul, and more than 100 new spirits and fortified wines have been added to the portfolio since October 2006.
Sainsbury's has put a focus on ethical and responsible retailing issues in the past year.
It has trialled two wines in a wine bottle-shaped PET, and is bottling more wines in the UK and reducing glass weights to cut its carbon footprint. New till prompts, refusal logs, signage and a store champion role are designed to emphasise the group's Think 21 policy. Four own-label lower alcohol wines have been launched, and Fairtrade and organic wines have been a key focus.
Asda launched a range of 25cl mini-tasting bottles, priced £1.50-£2, in an innovative bid to introduce customers to wines they might not otherwise try. And it offered customers who bought one of the 15 tasters a refund if they did not like the wine. Brands involved in the first set of 15 wines included Campo Viejo, Jacob's Creek and wines from Asda's own Extra Special range, but the wines available are to change regularly in a rolling programme.
Waitrose's new 24-page monthly drinks magazine, Thirst, is a great way of getting snippets of information to customers who want to know a little bit more about wine, beer and spirits - and those just looking for a few minutes' entertainment. The colourful A5 booklet is displayed in the BWS section and at tills, and aims to encourage shoppers to trade up.