Bad weather dampens UK beer sales in 2007

16 November, 2007

Total beer sales in the UK off-trade rose just 0.3 per cent last year, Off Licence News can reveal - using the latest Nielsen figures.

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 have not 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."

He added there were rises in the cost of glass, of which there is a shortage in the UK; sugar; malt; and distribution, people 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," Jardine added.

The Society of Independent Brewers said barley costs have gone up nearly 40 per cent and some hops have doubled in price. Chairman Peter Amor warned the price hikes, with the threat of a steep duty increase, could mean job cuts.

"After wages, raw materials represent the biggest single expenditure by small brewers, who now face the dilemma of whether to put up their prices and lose trade or absorb the higher costs and take the risk of their businesses becoming ≠economically unsound," he said.

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

A harder look at the figures shows some encouraging growth. Premium bottled ales grew by 4 per cent to £161 million, while 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 volumes grew 9 per cent and ale volumes 7 per cent.

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, or Italian Peroni Nastro Azzuro, which grew 40 per cent.

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