Wine and spirit sales in restaurants, pubs and hotels have dropped by 8 per cent and 1 per cent respectively in the last financial year with above-inflationary prices blamed for the hit.
According to the Wine & Spirit Trade Association's (WSTA) latest Market Report, the price of wines and spirits has risen by 6.5 per cent in the last year, more than twice that of inflation.
The results of the survey by CGA Strategy for the WSTA for the year ending March 2012, indicate that the Government's increasing tax on alcohol is having a knock-on effect on wine and spirits sales.
WSTA interim chief executive Gavin Partington said: "The above inflation increase in the prices of wines and spirits comes as consumers are feeling the pinch and being forced to cut back so it's perhaps not surprising that volume sales overall are depressed.
"But there are encouraging signs elsewhere with wine at higher price points showing strong growth over the year."
Although wine sales and spirit sales fell overall, there were some areas of growth. Malt whisky sales rose 31 per cent while liqueur sales, probably boosted by the growth in demand for cocktails, went up 7 per cent. Despite sales remaining flat for the year, vodka remains the biggest selling spirit in the on-trade.
Sparkling wine sales were also found to have improved, growing 2 per cent, but at the detriment of Champagne whose sales fell 13 per cent.
Those driving alcohol sales in the on-trade are the 18 to 34 year-olds according to the survey of 1,810 people. Forty per cent of 18-24 year-olds and 37 per cent of 25-34 year-olds say they regularly drink out of home while the number drops to around 22 per cent for those over 35.
The average monthly spend of alcohol in restaurants, pubs and hotels is £43 with beer and lager drinkers spending the highest amounts (£52 and £55 per month respectively) and men traditionally spending more than women.