Premiumisation drives on-trade drinks market

By Carina Perkins contact

- Last updated on GMT

Strong sparkling wine and Champagne sales are driving value growth in the on-trade market
Strong sparkling wine and Champagne sales are driving value growth in the on-trade market

Related tags: Alcoholic beverage

Sparkling wine sales have continued their impressive growth, with Champagne also showing strong upward movement, according to the latest market report from the Wine and Spirit Trade Association (WSTA).

The report revealed that on-trade alcohol volumes remained flat over the last quarter, with the beer, wine and spirits categories all showing overall volume decline.

However, sparkling wine sales rose 20 per cent over the quarter, with champagne sales up 9 per cent. Gin sales also rose 10 per cent in the 12 week period, while sales of rum were up 1 per cent.

The WSTA said this ‘premiumisation’ of the on-trade drinks market meant overall value grew by 2 per cent, indicating a willingness among consumers to spend more on out-of-home drinks.

“Despite disappointing volume growth, the trend towards higher value products in some categories and the growth in premium products like Champagne is an encouraging sign,” said WSTA Chief executive Miles Beale.

Duty relief

The WSTA report marks the first full 12 week trading period since the Chancellor decided to scrap the alcohol duty escalator, freeze spirits duty and cut beer duty in the March Budget.

Beale said that while there are signs of market recovery in the latest figures, it will be some time before pubs, restaurants and hotels feel the benefits of the cuts.

“While we are starting to see some benefit from the scrapping of the Alcohol Duty Escalator, it will take time and require sustained support to reverse the impact of six years of duty hikes on the wine and spirit industry, especially on pubs, bars and restaurants,” he explained.

“Given the growing importance of wine and spirits to the on trade, further duty relief for all products would provide a significant boost for struggling pubs.”

Read about the latest trends in beer, wine and cider sales in our special feature on alcoholic trends

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