independent

Friday 18 April 2014

Wine sales plunge by 10pc as tax hikes take their toll

Red wine
Wine sales have plunged by 10pc. Pictured posed

WINE sales have plummeted by up to 10pc this year as repeated government tax hikes eat ever further into the cost of each bottle.

The taxman now enjoys a windfall of nearly €5 every time you pull out the cork on a bottle of wine costing just €8.

And the repeated price increases are having an impact, with a new survey showing that 28pc of people are drinking less wine than they used to.

A survey by Wolf Blass & Lindeman's ahead of Christmas showed that for every €1 increase in the price tag, the number of consumers who stop buying a brand almost doubles.

This means duty hikes of €1.50 a bottle slapped on wine over the last year have forced many customers downmarket in their choices.

Wine seller Evelyn Jones of The Vintry off-licence in Rathgar, Dublin, said that these increases had a huge impact.

Most customers would not go over a certain threshold such as €8 or €10, she said, and they wouldn't raise that just because there was more tax on the bottles.

So, without knowing it, people might be paying €10 for a bottle of wine but getting a much cheaper wine than the same price would have allowed two years ago.

"It's a real challenge to find wines at the price people will buy them, and to explain that it's the Government which is getting so much of the price," she said.

"It's become very hard for the artisanal producers to compete against industrially produced wines; you end up with less quality and choice," she said.

Revenue figures to the end of June show a 10pc fall in wine sales this year -- even before the October Budget excise increase added another 50 cent to prices, said Ms Jones, who is also chairperson of the National Off-Licences Association (NOffLA).

Christmas is the time when wine shops try to make up for some of the decline in spending, but she said it was an increasing challenge with supermarkets using alcohol as a loss-leader to get shoppers in.

Some 12 off-licences had closed this year alone and NOffLA was predicting up to 25 more could shut their doors in 2014.

"The whole independent retail sector is struggling to compete with big supermarkets, but for those of us selling wine the Government has thrown in huge excise increases as well, said Ms Jones.

JOBS

Wine expert Jean Smullen said that a once-vibrant industry was being felled by the Government's refusal to consider the effect of tax increases on jobs. Over 60 jobs had been lost this year already, but because wine wasn't produced in Ireland, there was no consideration given to its employment record.

Irish people drank 107 million bottles of wine last year, according to Irish Wine Association figures.

Well over half the bottles purchased cost under €8 and eight out of 10 of them cost less than €9.

Irish adults drink around 17 litres of wine a year, which is less than half the 40-plus litres a head drunk in France, Portugal and Italy.

Irish Independent

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