Chateau Brexit? Average price of bottle of wine reaches record high

Wine lovers are suffering a Brexit-related hangover as the price of the average bottle has soared since the referendum to hit an all-time high of £5.56.

Prices have risen more in the first three months of the year than in the past two years, according to the drinks industry, which is warning of more increases ahead.

The average 75cl bottle topped £5.50 for the first time in the last three months of 2016, and has now hit £5.56 in the first quarter of 2017, according to the Wine and Spirit Trade Association (WSTA).

Miles Beale, its chief executive, said: “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.”

The main culprit is the weak pound. The slide in sterling prompted by the shock referendum result has driven up the cost of imported goods, which has made food, drink and other everyday items more expensive. The pound has lost 11% against the euro since the Brexit vote. About 90% of wine sold in the UK is imported.

The WSTA said Brexit’s impact had led to a 3% increase in wine prices in the 12 weeks to 25 March, which compares with a 1% increase over the previous two years – 2015 to 2017. The average bottle is up 19p from £5.37 during the same 12-week period in 2015; and up 16p from £5.40 during the same period in 2016.

For example, Bordeaux chateau owner Gavin Quinney has increased the price of his 2015 Trois Hectares Blanc to £11 from £9.95 last December.

For UK wine lovers there is worse to come. The 3.9% rise in alcohol duty announced by the chancellor in the spring budget, which took effect on 13 March, adds a further 8p to the average bottle. The WSTA had lobbied for a 2% cut in duty to help the UK wine industry.

Experts predict wine prices will continue to go up as the triple whammy of Brexit, rising inflation and duty increases take their toll.

The average price of a bottle of wine has risen more in the first three months of 2017 than it had in the past two years, and now costs £5.56.

Champagne drinkers also face higher prices. The WSTA predicted in February that the cost of an average-priced bottle would go up by 5% or £1 per bottle, while a bottle of prosecco would increase by 9%, adding a further 59p per bottle.

Beale said: “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.”

The industry employs 172,000 people directly and supports a further 105,000 in the supply chain.

More than half (56%) of what Brits paid for a bottle of wine in Marchwent on alcohol duty (£2.16) and VAT (93p). Duty is even more for a bottle of sparkling wine, at £2.77. This was before the latest duty rise came into effect.

By contrast, 14 countries in the EU have zero rates for wine. Only 21% of the price of a bottle of wine sold in France or Spain goes on tax, and 19% in Germany.

But this has not put Brits off drinking wine. The UK accounts for nearly 15% of the world’s wine imports; it is the second-largest market by volume (behind Germany) and by value (behind the US).

The author: Michel THEYS

Michel Theys, a Belgian native, began his career as a civil servant, serving the public for several decades. After retirement, he shifted gears to follow his passion for journalism. With a background in public administration, Theys brought a unique perspective to his reporting. His insightful articles, covering a wide array of topics, swiftly gained recognition. Today, Michel Theys is a respected journalist known for his balanced and thoughtful reporting in the Belgian media landscape.

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