British love affair with "cheap" vino?
Some interesting insight into Brit's wine habits was revealed in the press this week, as research showed less than half of Brits will pay more then £6 for a bottle of wine.
Drinks consumer insight specialists Harpers say supermarket price wars are threatending to 'dumb down' British consumer's attitudes to wine. It reveals 80 per cent of all wine sold in the UK sells for less than £6 a bottle, with only 7% willing to pay £10 or more.
Wine has been the biggest area of UK growth in alcohol sales over the decades of increasing consumption, with the UK still the world's biggest importer of wine. Trends of more regular home drinking since the 1950s, including more women drinking and supermarkets using alcohol as a big draw are likely to be key factors. However with alcohol consumption having dropped since 2004, significant 'growth' in UK any alcohol markets may be unlikely, so alcohol producers have been seeking to drive demand for premium products.
But should wine drinkers feel any shame by our love of cheap plonk - even if a third of us can't name a single grape type? An anonymous supplier said in the Telegraph "The fact is, it’s hard to make any money in Britain, but it’s a great market if you want to get rid of bin ends or if you’ve got tanks to empty for the next harvest. You chuck it in the UK’s direction because there they’ll suck in cheap wine."
The Daily Mail take says that high tax rates mean once tax and shipping costs are met it leaves little profit. Interestingly though the Goverment's below cost ban, currently delayed, calculates duty + VAT on a 12.5% ABV wine at £2.41. Arguments against minimum pricing included the charge that raising the price would shift significant additional profits to producers and retailers, but presumably retailers choose not to as alcohol promotions are a big draw in the war for market share.
End of ailse displays increase sales by up to 46%
The Brits love of a drink bargain may also be confirmed by recent University of Cambridge research that found end of aisle displays significantly increased sales of displayed products: 46% for spirits, 34% for wine and 23% for beer.
The researchers suggest restricting end of ailse displayes could be an important area for policy outside of price, and in line with 'nudge' approaches initially favoured by the coalition (but not without criticism). In 2011 Alcohol Concern called for supermarkets and off-licenses to confine displays of alcohol to a single area of their premises, claiming the widespread promotion of alcohol helped fuel a harmful drinking culture.
However the research also confirmed the role of price in influencing purchasing: "lower price was also associated with increased sales for all of the products, with the biggest impact on alcohol. For every 1% decrease in the price (per volume), there was approximately a 5% increase in sales volume."
Wales consults on minimum unit pricing
The Welsh Government has proposed to introduce a 50 pence MUP in its Public Health White Paper. The consultation document says: "Given the link between consumption and harm, and the evidence that affordability is one of the drivers of increased consumption, the Welsh Government’s view is that Minimum Unit Pricing for alcohol is a key policy proposal for tackling the health harms associated with alcohol misuse."
Scotland's health groups call for end of industry led opposition of MUP
Health groups from across the UK have signed an open letter urging the Scotch Whisky Association (SWA) to drop their legal challenge to MUP. The minimum pricing bill was passed by the Scottish Parliament in May 2012 and planned to come into force last year. However it faces ongoing legal challenges despite finding favour from the Scottish Judiciary that MUP was not in breach of EU competition law.
Scotland is now awaiting the outcome of the SWA appeal to the Court of Session, which is then likely to be followed by hearings at UK Supreme Court and the European Court of Justice. Dr Evelyn Gillan, Chief Executive of Alcohol Focus Scotland warned it could be five years before the case concludes and said: "The SWA has mirrored the tactics of the tobacco industry in delaying life saving legislation. They oppose any measure that might affect their sizeable profits, no matter the obvious benefits to people's health".
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