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16 November, 2007


Total beer sales in the UK off-trade rose just 0.3 per cent last year, the latest Nielsen figures have revealed.

The washed-out figures are mainly thanks to the summer that never happened, and the UK's top brands are counting the cost of a year with no major football tournament.

Market leader Stella Artois's sales dropped 5 per cent to £518 million, Carling's fell 3 per cent to £361 million and Budweiser's 8 per cent to £151 million.

As might be expected in a category regularly criticised for being sold below cost as a footfall driver, total beer volumes crept up a little more than value sales, by 0.8 per cent to 18.8 billion hl.

The wet summer also brought poor cereal crops and pushed up prices for raw materials - and many brewers are warning that beer prices, which haven't seen inflation for years, will finally have to rise.

Neil Jardine, take-home director for Greene King, said: "My fear for next year is around rising costs, which is at odds with some retailers who believe it is all about driving prices down.

"As a business we are seeing rises in the cost of glass, of which there is a huge shortage in the UK; the cost of sugar; the cost of malt; and the cost of distribution, people, utilities and cardboard.

"My fear for the mid-term and longer-term is whether it will stop brewers doing bottles and cans at all because there is no money in it. The category is fascinating and dynamic and supports a lot of local industry in the UK, and it would be a real shame if somehow consumers didn't get what they wanted because retailers weren't prepared to pay a fair price for a high-quality local product with provenance."

Lager sales - which make up 83 per cent of the beer market - fared a little better than ale, climbing 0.6 per cent compared to a 1 per cent decline. Stout lost 1.1 per cent of its value, but a new ad for Guinness - which has 81 per cent of the stout market - is hoped to push the brand and the category back into positive figures.

A deeper look into the figures shows some encouraging growth. Premium bottled ales grew by 4 per cent to £161 million, taking a 37 per cent share of the ale market, while the tiny segment of non-alcoholic lagers grew 9 per cent to £12 million.

And the long warm autumn, with England's success in the Rugby World Cup, may have helped brewers claw something back from 2007 - in the eight weeks to Oct 6, lager sales grew 9 per cent compared to the year before, and ale sales were up 7 per cent, according to Nielsen.

The signs are that drinkers are going for brands with a back story - such as Indian restaurant staple Cobra, which grew sales by 54 per cent; Italian Peroni Nastro Azzuro, which boosted sales by 40 per cent, and Belgian Leffe Blonde, which climbed 37 per cent.

Or they are looking for something a little bit different - citrus-flavoured Foster's Twist was the biggest grower of the year with a massive 713 per cent sales surge, and InBev's Peeterman Artois made it into the top 50 in its launch year with nearly £8 million sales.

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