Off-trade

A sparkle in our step?

Helen Coburn reports on the recent upturn in the sparkling wine market, driven by non Champagne bubblies

With 2013 an uneven year for wine sales, it was cheering to hear that sparkling wine sales appear to have gone up by at least 20% over Christmas. The spike was driven by non Champagne bubblies and, with the consumer being increasingly price conscious, there was more than usual interest in low pressure sparklers. These are what the Italians call frizzante, rather than full spumante, generally needing only a crown or small cork closure, rather than the classic mushroom cork. They attract the same excise as still wine, so, at entry point, they can be around €5 cheaper than a traditional bubbly with the same original cellar price.

While a number of independents reported a steadying of sales in the second half of 2013, it now appears that for the first half of the year, excise receipts fell by almost 10%. It may be that less committed wine drinkers, who also enjoy other drinks while socialising, switched their tipple, while those who are more wine focused have continued to buy. Such customers tend to pay more for their wine and also shop more at independents.

Nevertheless, the October budget added another 50 cents in excise and the full impact of this has yet to be seen. The news of increased bubbly sales is at least a good sign. Consumers may be feeling more confident but, even if they resume wine buying at the same rate of a few years ago, they will still be getting much poorer value for their money. From an €8 wine, the taxman now gets just under €5, putting great pressure on margins.

This is a special problem for the hotel and restaurant trade because food service operates on very tight margins and the sale of a bottle of wine may constitute most of the profit on a meal. According to events manager and wine educator, Jean Smullen, over 60 jobs have been lost in the off-trade, and there have been 12 shop closures. “Even though wine isn’t produced in Ireland it can generate significant employment,” she said. “And that’s not just in the off-trade. Sales of wine can also keep a restaurant going, thus generating local service jobs.”

All the same, we now drink around 17 litres of wine per head per year, which is quite a change from 20 years ago. However, 80% of our purchases are under €9 a bottle. Around 75 off-licences have closed since 2009, which means less activity on our local main streets, where most independents are located.

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