Brexit pushes UK wine prices to all-time high
The average price of a bottle of wine has now reached £5.56, according to the WSTA’s market report.
The impact of Brexit, leading to a drop in the value of the pound and the higher cost of imports and rising inflation, led to a 3% increase in wine prices for the 12 weeks to the beginning of 2017. This compares to a 1% increase over the previous two years.
Furthermore, the WSTA predicts wine prices will continue to rise thanks to the impact of Brexit, and a 3.9% rise on alcohol duty in the March Budget.
‘This is not a one-off’
The WSTA says that the UK wine industry has done its best to absorb rising import costs after the Brexit vote in June 2016, but adds that it was only a matter of time before any cushioning against the effects of a weaker pound ran out and costs were passed on to the consumer.
It had predicted a 29p rise in the price of a bottle in wine coming into the UK from the EU.
Data now show that the price of an average bottle of wine has increased from £5.37 in Q2 2015, to £5.40 in Q2 2016, to the latest figures of £5.56 in Q2 2017 (12 weeks ending March 25).
Miles Beale, chief executive, WSTA, said: “Last year the WSTA predicted that Brexit and the fall in the value of the pound, compounded by rising inflation, would force the UK wine industry to up their prices.
“Sadly this is now a reality as an average priced bottle of wine in the UK is at an all-time high.
“Unfortunately, for both British businesses and consumers, we are clear that this is not a one off adjustment, but rather that wine prices will continue to rise. What is even more concerning is that this does not take into account the inflationary duty rise – at a painful 3.9% - on alcohol inflicted by the Chancellor in the March Budget.”
For a bottle of wine sold in the UK, 56% (£2.16 on an average bottle) goes on wine duty.
The WSTA calls for the government to ‘start showing its support’ for the wine industry by readdressing the duty rates in the autumn budget.
The UK wine industry employs 172,000 people directly and a further 105,000 indirectly. It generates £9.5bn to the Exchequer including £4bn in duty, according to the WSTA.
