Pessimistic outlook for UK wine market
- Thursday 14 May 2009
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.’
‘If Paragon is the only victim of this recession, we’ve got off lightly,’ he added, alluding to the closure of wine agency Paragon Vintners two months ago.
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.