Holter on the loose
Published:  16 November, 2007

Spare a thought for a sector in decline

Remember when we were all worried about wine? Decades of relentless growth crashing to a halt as consumers got bored/ran out of money/joined the gym? The latest Nielsen figures appear to put those dark days behind us: light and sparkling wine sales are up 7 per cent, and Champagne is steaming ahead on 9 per cent. It's a sterling performance, even if most of the growth is coming from rosé.

So let's worry about beer instead. Inflation is running at about 4 per cent (mirroring value growth in the off-trade as a whole), so the total beer sector's zero per cent growth is actually a decline, as is the 1 per cent "increase" on lager.

Beer pricing will have to move up next year if the brewers are to cope with the escalating costs of raw materials. The question is, will retailers allow this to happen or will they recite the familiar mantra that "our customers expect us to offer fantastic value"?

Leaving brewers to cope with the crisis on their own would be particularly cruel given that lager is notoriously now cheaper than water in some supermarkets and prices are lower than they were 20 years ago. And, on top of that, there is the backdrop of a declining market and the very real prospect of a Euro 2008 without a home nations representative.

One brewer told me last week: "Because this situation is affecting everyone in the brewing world, it's difficult for any retailers to look the other way." Wouldn't it be great to think that he was right?

More tax-talk nonsense

The media is lapping up this talk of a 10 per cent tax increase on alcohol in a bid to curb binge drinking. It's the same media which routinely reports, after Budget announcements, that readers will be paying 4p a bottle more for their wine when the truth is that most bottles will still carry £3.99 tags in the morning. Because duty increases aren't passed directly to consumers.

If the government really wants to control the price of alcohol, it would essentially have two options. One would be to introduce a duty increase so huge that it couldn't fail to impact on the buying public. The second would be to nationalise drinks retailing, just as the Swedish are reportedly ready to abandon that policy.

Brave decisions. And, thanks to the thriving black market both would create, neither of them would put an end to binge drinking.

Promotion overload

A retailer I spoke to last week confessed to poster addiction. It's a common ailment. The symptoms are bombarding your customers with so many screaming messages that none of them are taken in. I'll bet you could put a giant sign on many off-licence windows reading "Kylie nude here today" and hardly anyone would mention it. Some of the new wine merchants seem to do very well with the "minimal" look, and are proving that less is often more.




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