Budget fails to dampen supermarket promotions

20 April, 2012

The latest round of increases in drinks duty has failed to dampen the ardour of supermarkets for heavy price promotions, with a range of deals hitting the market since the Budget.

New price inflation figures for alcoholic drinks suggest that wine is increasingly taking the hit over spirits and beer.

The consumer price index for March showed a 12% annual spike in spirits prices, with beer prices up by 9.9%, both sectors seeing sharp rises since the start of 2012.

The CPI figure for wine, however, fell from 5.4% in February to 2.6% in March, according to analysis by the Wilson Drinks Report.

Managing director Tim Wilson said the increase for spirits was more than  three times the overall annual rate of inflation measured by the CPI.

“We expect further misery for responsible drinkers when the impact of the latest duty increases start feeding through in retail selling prices,” said Wilson.

“The beer category is also potentially vulnerable to another dry summer, with concerns being raised on the harvest yields for premium malting barley.”

Carling brewer Molson Coors has already expressed concerns that the drought across much of England would put upwartd pressure on beer prices. 

Wilson added: “The average price of a bottled wine will break through the symbolic £5 barrier during the next few months.”

But in the short term, major retailers have responded to the Budget by implementing price deals across a range of brands, many of them in wine, as they jockey for position ahead of what they hope will be a bumper summer for drinks sales, fuelled by major events.

Tesco’s online by-the-case service has half-price deals on several wines and free delivery as part of a Spring Wine Festival. 

In-store deals include half-price on Andre Carpentier NV Champagne, at £14.49, and on wines from Hardys, Isla Negra and Codorníu.

Sainsbury’s was also selling half-price fizz this week, with Codorníu Original Rosado Brut at £6.99, and additional half-price deals on claret and Italian Pinot Grigio.

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