Independent off-trade wine sales share continues to fall 5 percentage points

The share of the wine market held by independent off-licences has fallen five percentage points from 26 per cent to 21 per cent over the last year, according to the Irish Wine Market 2010 from the Irish Wine Association.

The annual report shows that distribution of wine in the off-licence sector continues to be mainly via the multiples which grew share by one percentage point to 51 per cent in 2010. Symbol Groups at 15 per cent (down from 17 per cent) and the Discounters at 10 per cent (up from seven per cent) comprise the other retail outlets for wine and in the interestes of responsible marketing, the IWA announced that it’s  not in favour of “the agressive discounting witnessed over the past year in some retail outlets”.

According to the report, authored by IBEC Senior Executive Aoife Clarke, “The wine industry in Ireland has faced unprecedented challenges in recent years, resulting in many company closures”.

However the wine market has grown “exponentially” from its low base in the 1990s and the report points out that any increase in excise on wine could well result in a return to cross-border trade where such shopping is reckoned to have cost the Exchequer €400 million.

The report shows that total wine sales increased 14.5 per cent in 2010 to 8.7 million cases from 7.6 million in 2009 with sales of table wine increasing 13.7 per cent to 8.3 million cases from 2009’s figure of 7.3 million cases.

Table wine comprises 96.4 per cent of all wine sold while sparkling wines account for 2.6 per cent of the total figure.

White wine grew more popular in 2010 taking an increased share of the wine market, up from 45 per cent to 49 per cent at the expense of Red which decreased share from 50 per cent to 47 per cent. Rose lost a percentage point to claim just four per cent of the wine market.

At the same time, males are getting more into wine with men growing their share of the wine market to 45 per cent from 43 per cent.

Wine also enjoyed an increasing share of the €6.6 billion overall alcoholic beverage market(accounting for 8.1 per cent of total consumption expenditure), growing its share from 17.6 per cent to 18.9 per cent at the expense of beer which shrunk from 53.2 per cent of the market in 2009 to just 50.9 per cent in 2010.

However the on-trade continued to lose share of the wine market resulting in a drop to just 21 per cent of the market comprising Hotels & Restaurants and Pubs (both down one percentage point to 15  and six per cent per cent respectively).

The IWA also points out that the average MAT retail price of a bottle of wine has fallen 10.5 per cent between 2009 and 2010 while that of sparkling wine has fallen by 13.6 per cent and champagne by 14.1 per cent thanks to the December 2009 excise duty decrease of 20 per cent while VAT was reduced to 21 per cent.

With 2.24 million cases out of a total of 8.46 million cases, Australia continues to lead, increasing its share of the wine market one percentage point to 26.5 per cent at the expense of Chile (still in second place) which lost 0.9 of a percentage point, dropping to 21.3 per cent.

France reduced its share by 0.3 of a percentage point, remaining in third place with 12.6 per cent while the US remains in fourth with a greatly reduced share, down 1.9 percentage points to 10 per cent.

Spain has overtaken South Africa into fifth place, growing its share from 6.9 per cent in 2009 to 7.6 per cent in 2010 while SA found its share reduced from 7.4 per cent to 7.1 per cent.

Italy, in seventh place, grew share 1.1 percentage points to 6.5 per cent and New Zealand grew share to 5.0 per cent from 2009’s 3.2 per cent. German wines lost 1.5 percentage points and are now responsible for just one per cent of the wine market.

Ireland’s annual per capita consumption figure for wine reduced in 2009 to 15.4 litres from 17 litres in 2008 although according to CSO and Revenue Clearance estimates, this figure is back up to 17 litres in 2010.

In 2010 wine excise generated €219 million for the Exchequer or 27 per cent of total alcohol excise collected, down from 2009’s €242 million (25 per cent) figure.

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