Blended whisky losing out with the Brits

British spirits drinkers are abandoning blended whisky in favour of foreign products such as vodka. A new report from market analysts Datamonitor reveals that although whisky remains the most popular spirit in Britain, sales are in decline, reports Kim Hunter Gordon.

British sales of vodka, on the other hand, have risen rapidly since the 1960s when it was rarely drunk. Datamonitor's Spirits in Europe to 2008 report predicts the gap between whisky and vodka will be less than 0.1 litres by 2008.

The trend reflects the strong market image that vodka carries, particularly its use in mixed drinks. Datamonitor drinks analyst John Band said: "British people consider vodka and light rum more palatable in mixed drinks or cocktails; they are averse to the sacrilege to mixing whisky with cola or lemonade."

The emergence of many flavoured vodka products, such as Absolut Citron, may have boosted vodka sales, with young Brits enjoying vodka's image but not necessarily its taste. Flavour is an area of strong growth in spirits sales, so much so that last week the Mexican government announced that it will lift its ban on the production of flavoured varieties of tequila.

The UK spirits market was worth just over £9 billion in 2003, and the average Brit drank 3.7 litres of spirits a year, according to Datamonitor. Just over half of these sales were in bars, restaurants and nightclubs - which is large in comparison to the neighbouring French market, where three quarters of the spirits trade were in off sales.

Yet a similar trend is afoot in France. The country's traditional drinks of anis and pastis have been plummeting whilst, ironically, blended whisky is on the rise - whisky sales are now higher in France than in the UK. "The French not only now drink more Scotch than the Scots, but are on track to drink more Scotch than they drink brandy or pastis," said Band. Conversely, sales of Cognac are rocketing in the US after African American rappers declared it their favourite tipple.

David Williamson, of the Scotch Whisky Association, said that he was not concerned by the report, reaffirming that "blended whisky still counts for a third of UK spirit sales. Although UK sales were down by 1 per cent this year, they rose by as much as 15 per cent in European and worldwide markets."

Sales in the UK of Scotland's high quality spirit category, single malts, have been more positive, rising 1.5 per cent since 1998. In fact, figures from the Scotch Whisky Association show an 11 per cent growth in single malt sales within the UK for the first half of 2004.

Growth was also seen in foreign markets such as France. In fact, the French and Spanish drunk so much Cardhu malt last year that owner Diageo had to keep stock rolling by introducing the controversial (and now abandoned) strategy of selling a "pure malt" blend under the single malt's name.

Datamonitor's figures also showed that, across Europe, the largest group for spirit drinkers is the over-55s, who account for 46 per cent of the UK market, and that the 45-54 age group is the next largest. Band proposed that "winning over young adult drinkers from alcopops and beer is not necessarily the best way to make money from spirits. Over-45s have increasingly more cash to spend on drinks. To target older consumers, marketers need brands that have a strong quality perception."