Flavoured rum and gin buck trend of decline

Despite the abolishment of the automatic tax escalator, the UK’s spirits industry dipped in the last financial quarter, but flavoured rum and gin were the stand out categories.

This is according to the latest market report complied by the Wine and Spirits Trade Association (WSTA), which covers the trading period from this year’s March Budget, when Chancellor of the Exchequer George Osborne scrapped the automatic alcohol tax escalator and froze all duty on spirits.

The WSTA claims that despite these changes, the UK’s wine and spirits sector experienced “disappointing volume growth”, with total sales falling 3% in the past 12 months and the summer months reporting “flat” growth.

However, the organisation said that a trend of premiumisation was apparent, providing “hope that the market may finally be turning a corner”.

“Despite disappointing volume growth, the trend towards higher value products in some categories and the growth in premium products like Champagne is an encouraging sign,” said Miles Beale, chief executive of the WSTA.

“While we are starting to see some benefit from the scrapping of the alcohol duty escalator, it will take time and require sustained support to reverse the impact of six years of duty hikes on the wine and spirit industry, especially on pubs, bars and restaurants.”

Beale added that further duty relief for all products would “provide a significant boost for struggling pubs”.

Figures show that in the off-trade, rum was the spirit of choice, with quarterly sales up 6% and flavoured rum sales rocketing by 34%. Meanwhile, in the on-trade, sales of gin were up 5% over the year and 10% in the latest 12 weeks.

Vodka, gin and whisky were also revealed to be the three most popular types of spirits among UK consumers.

The WSTA’s market report draws on data from leading independent sources, Nielsen and CGA Strategy, while the consumer research is based on YouGov and WSTA analysis.

The report follows a study into festive drinks choices, which forecast that gin and tonic would be the most popular drink over the Christmas period.