NEWS

Brexit Pushes Wine Prices To All Time High With Further Increases Set To Come

'Triple whammy' of Brexit inflation and duty increases 'yet to take their toll'.

01/06/2017 12:48

Brexit has pushed the average cost of a bottle of wine to an all-time high of £5.56, according to latest industry figures which warn this is just the beginning of price hikes. 

The average price of a bottle of wine has risen more in the last 12 months than it has in the last two years, the Wine and Spirit Trade Association’s latest Market Report revealed on Thursday. 

In further bad news for wine lovers, industry experts predict that prices will continue to rise as the “triple whammy effect of Brexit inflation and duty increases take their toll”.

The WSTA report said an averaged priced bottle of wine in the UK first surpassed the £5.50 mark - for the first time ever - during the last three months of 2016 - three months after Britons voted to leave the EU on June 23

Wine is now 19p more experience a bottle compared to the £5.37 average during the same 12 weeks of 2015, and is up 16p, from £5.40, during the same period in 2016.

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Brexit has pushed the average cost of a bottle of wine to an all-time high of £5.56, industry figures have revealed

“The impact of Brexit”, the report said, led to a 3% increase on wine prices in the 12 weeks to the beginning of 2017 as the pound plummeted, pushing up the costs of imports and increasing inflation. During the previous two years prices increased 1%.

The report noted that the increase was the start of many more price hikes as the figures did not take into account the “impact of the painful 3.9% rise on alcohol duty inflicted by the Chancellor in the March Budget - adding another 8p to the average priced bottle of wine”.

In October last year the WSTA warned wine drinkers that within a year wine coming into the UK from the EU would go up an average of 29p a bottle.

“Following the EU Referendum in 2016 the UK wine industry has done its best to absorb rising import costs, but as predicted 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,” the report said. 

Miles Beale, chief executive of WSTA, said “sadly” the latest figures were only the beginning. 

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The Wine and Spirits Trade Association has warned that the price hike is only the beginning of increases

“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,” he said.

Beale added: “We all know that Brexit will be complicated, but something has got to give and government must start showing its support for the UK wine industry and the 275,000 jobs that our industry supports by tackling our excessive duty rates at the Autumn Budget.”

Some 56% of the money Brits pay for a bottle of wine, the equivalent to £2.16, goes on wine duty, the report noted, adding that the tax was even higher on a bottle of sparking wine, at £2.77.

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The UK wine industry generates £9.5bn to the Exchequer including £4bn in duty and 'supports' 275,000 jobs

Fourteen countries in the EU have zero rates for wine, the WTSA report noted, detailing how only 21% of a bottle of wine sold in France or Spain is taken up in tax and 19% in Germany.

Britain is “at the centre of the global wine trade” accounting for nearly 15% per cent of the world’s wine imports, the report said. It is also the second largest trader by volume (behind Germany) and by value (behind USA), “cementing its role as a key international player”. 

The UK wine industry generates £9.5bn to the Exchequer including £4bn in duty and “contributes to the public purse more money than any other alcohol category”, the report states. 

In October HuffPost UK reported that the price of KitKats and Nespresso pods could be hiked because of Brexit. The following month reports emerged that supermarkets had increased the price of bananas for the first time in five years and Ikea warned leaving the EU may also lead to it increasing prices. 

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