Lower-alcohol not slowing wine decline

Rapid growth from the new wave of lower-alcohol wines is failing to halt decline in the overall wine market. 

According to the latest figures from Nielsen, consumers are still drifting away from wine, which is continuing to fall. 

New data reveals that light wine volume sales are down 2.3% in volume and up 3.6% in value, on the back of duty and VAT increases (MAT March 31 2012). 

At the same time, British wine – which has yet to break the million-case barrier – is up by 39% volume and 59% value. Low-alcohol wines are growing from a slightly larger base and are up 26% by volume and 39% by value. 

However, Nielsen analyst Gavin Humphreys said that when the light, British and low alcohol categories are combined, it shows consumers are still deserting the market. 

He said: “For wine overall, values are up 4% but volumes are down 1.8%, so there are still people moving completely out of wine. 

“There are people who have moved into British wine because of the price points, and reduced alcohol because of price and because they are getting more prominence in-store. But I’m not sure it’s because people are saying they want to drink low-alcohol products – retailers have to be seen to be doing the right thing.”

He added that sales of reduced alcohol wines had not filled he gap in sales of £3 wines, which for higher strength wines had disappeared due to price hikes. He warned the continued battle for market share continued to put pressure on pricing and discourage shoppers from buying more expensive lines.

“There is still market share paranoia among the retailers and they are still using alcohol [to drive footfall], but I’m not sure it delivers. Too many people are buying off the gondola end so aren’t encouraged to go down the aisle and be exposed to more expensive wine. 

“We remain one of the most important nations for all producing countries because we can deliver enormous volumes, but at what profit? Just look at exchange rates, that’s where Australia has been hit so hard.”

He said although Australia still led, it was down 8.6% by volume and 2.8% by value