UK on-trade and off-trade market insights

Wine is worth £6.7 billion in the United Kingdom (UK) off-trade and £4.2 billion in the on-trade, according the Wine and Spirit Trade Association’s new 2016 Market Overview report. Wine contributed 37 per cent of the alcohol duty paid in the UK in 2015, an equivalent of £3.95 billion. The UK wine duty is the second highest in the EU and since 2008, wine taxation has increased by 54 per cent. It is the sixth largest wine market in the world and 71 per cent of UK adults drink wine, which is the equivalent of 39 million people.

The importance of the UK wine market is reflected in Australia’s export figures. The UK is Australia’s number one market for exports by volume and in the year ended June 2016, value remained flat at $369 million and volume decreased by 3 per cent to 243 million litres. An increase in the value of bottled wine exports by 3 per cent to $163 million offset a decline in bulk wine exports of 2 per cent to $206 million. As with many markets around the world, there have been positive signs at the top end of the market; the above $10 per litre FOB price point increased by 15 per cent to $25 million. Australia is still number one in the UK off-trade and is the only country in growth in the top five countries of origin.

The UK retail market is changing to keep up with innovation and providing a premium customer experience. With the growth of the online channel, retailers are having to re-invent themselves in order to offer something new and different for consumers. Wine Intelligence’s blog 'Retail Theatricals' discusses some of the strategies that bricks-and-mortar shops, wine and otherwise, in the UK have been utilising to entice consumers back.