The leading names in the UK wine industry have a pessimistic outlook for the future, according to a new survey.
The survey, which questioned 50 top executives from the UK wine industry, found that 30% of respondents were feeling pessimistic about the future of the UK wine market over the coming year. Last year, less than 15% felt that way.
For the first time in three years, the survey, conducted annually by industry publication just-drinks, found that less than half of those questioned - 37% compared to 63% in 2008 - were feeling positive about the next 12 months.
As he revealed the results of the research at the London International Wine Fair, Chris Brook-Carter, editorial director of just-drinks, said the findings indicated that 'there is recognition that the UK is an increasingly tough place to do business and make a profit.'
He then quoted Tim How, former chief executive of Majestic Wine, who said the current situation facing the UK wine industry was a 'perfect storm.'
The negative forecast for the UK market is due to a combination of factors, including the recession, duty increases, the weakness of the Stirling and the constant barrage of price promotions which hammer down supplier margins.
'The multiple grocers are guiding the consumer down a cut-price cul-de-sac which, allied to government pressure on promotional activity, will lead to further reduced ranges and a dull market,' John McLaren, UK director of the Wine Institute of California, told the survey.
'To be optimistic would be to ignore reality,' added Symington Family Estates' joint MD Paul Symington. 'The UK wine market is exceptionally difficult due to the major recession, compounded by a very serious currency collapse.'
Meanwhile, Neil Barker, sales director at Foster's EMEA, had a more positive view of the future.
'We are in a recession and therefore need to recognise that people will be looking for value for money, whilst at the same time planning for the long term health of the wine industry,' he said.
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I have been around the trade now for 37 years! And while survived the 1973 , early 80s and 90s recessions there is no doubt that this is the worst! The "perfect storm" clouds remain stubbornly over the industry with that mix of over supply , currency , global downturn , margins(-suppliers NOT retailers!), promotional participation , taxation and social aspects (aka do gooder/Government interference!)
As long as the multiple retailers with c half of all wine sold in the UK moving off their shelves , their headlong dash into how many different divisions of £10 they can think about and a total lack of commitent or partnership to the supply side with even the big T declaring that wine is no different from main stream grocery then we have a problem!
Trying to be "half full" however we do have a 140 million 9 litre case market , we do have a business that is worth north of £8 billion- and wine remains on the consumer agenda! And the likes of Waitrose , M&S and the Wine Society plus a host of Independents prove that it can be done
But lets not encourage those suppliers who are beginning to turn their backs on the UK to more profitable countries by beating them down with stupid demands for margin growth
Allan Cheesman, UK
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