Steve Barton, former joint director of Brand Phoenix, who is concentrating his efforts on growing its brands inter- nationally, has warned the UK will slip from selling 95 million 9-litre cases to 79 million 9-litre cases and needed to look beyond “disingenuous” deals for a solution.
He said: “It’s inevitable that the half price mechanic will have to disappear in five years because how high can you go to be able to say it’s now half price. How much more disingenuous can these offers become?
“It’s not the trade’s fault – it had to find ways to react after the government smashed duty – but the trade will have to survive without half price.”
He added: “Between 2000 and 2009 off-trade wine sales doubled, but if the industry thinks it can just carry on doing the same thing and those sales will come back, they’re living in a dream land. The three-for-£10 mechanic that drove all that growth no longer exists and we are about to see the end of half price. The industry has to react.”
He said the market must adapt further as it grapples with the continued duty escalator for another two years, which adds 32p of fixed costs.
“Wine is just too expensive, that’s why there is such a big opportunity for products like Hooch. Brand owners have got to reposition their products so that people can still afford them.”