According to the Wine & Spirit Trade Association (WSTA), the leading wine industry group in the UK, wine prices are very much on the rise. They also warn of more price rises to come, thanks to the fallout from the Brexit vote in June 2016.
The average price for a bottle of wine rose above £5.50 for the first time at the end of Q4 2016. That’s a price increase of three per cent and ended up setting the price at £5.51 as we moved into the first quarter of 2017. And, as we reach the end of Q2 this year, the average price of a bottle of wine has moved again to £5.56.
It’s likely that major retailers will absorb some of the costs somewhere in the supply chain, but even that can’t stop the price rises being passed onto the consumer, says the WSTA.
Wine importers, restaurants, bars and wine merchants are all feeling the pressure of increased costs across the board.
The Brexit effect
As for the top end of the market, we’re still waiting for data to show how much the changing economic climate following Brexit has affected the prices. We do know, however, that Bordeaux 2016 en primeur wines have been affected by steep price rises. Due to a weak sterling, anything Bordeaux merchants release costs about 10 to 15 per cent more in the UK when compared to the 2015 release.
Some merchants based in the UK have found that they have had increased demand from buyers that use dollars. For example, there have been more orders from Asian buyers, and from those in the US. But, restocking from Europe has, of course, become more expensive.
The WSTA are keen to pressure the government regarding duty tax and to make sure than English ports are protected if and when the UK leaves the EU customs union. It remains to be seen whether their pressure has had any results.
Miles Beale, CEO of the 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.’