LONDON — The cost of a bottle of wine in the UK has hit a record high and is only going to keep rising as Brexit continues to hit British pockets, the body representing the wine trade has warned.
The Wine and Spirit Trade Association’s new Market Report — which, as its name suggests, examines the cost of wine and spirits — shows that in the final three months of 2016 the average bottle of wine cost 3% more than in the previous quarter, hitting a record high of £5.56.
Since the Brexit vote 11 months ago, the pound has dropped from close to $US1.50 to around $US1.28, making it more expensive to import goods into the UK. That, in turn, has created inflation, especially on imported products like wine, the vast majority of which comes from outside the UK.
“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,” Miles Beale, the Wine and Spirit Trade Association’s 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.”
Things are set to get even more expensive in the coming months as inflation continues to rise, and a new duty on alcohol comes into force.
“What is even more concerning is that this does not take into account the inflationary duty rise — at a painful 3.9% – on alcohol inflicted by the Chancellor in the March Budget,” Beale said.
One saving grace for Brits looking to get their hands on cheap booze is that British supermarkets are continuing to keep prices subdued on groceries to maintain competitiveness. This is particularly true of Tesco.
Tesco has been notable in fighting price rises from suppliers driven by Brexit. The suppliers want supermarkets to put prices up so their profit margins are protected. But Tesco has fought back, aiming to keep shoppers happy by keeping inflation as low as possible. The supermarket memorably had a bust up with Unilever over the price of Marmite and stopped stocking Heineken drinks in a similar row.