WSTA Market Overview 2017
Contents The UK Alcohol Industry p.4 The Wine Story p.8 The Spirits Story p.12 A Reponsible Industry p.16 Taxation p.18 IWSR UK Wine and Spirits Data p.22
About the WSTA The WSTA represents over 300 companies producing, importing, exporting, transporting and selling wines and spirits in the United Kingdom. WSTA members range from major retailers, brand owners and wholesalers to fine wine and spirit specialists, logistics and bottling companies. We campaign for a vibrant and sustainable wine and spirit industry, helping to build a future in which alcohol is produced, sold and enjoyed responsibly. A special thanks to the IWSR for providing the data for this publication. And also to:
The UK Alcohol Industry The UK alcohol industry s worth 40.3bn in sales; 21.3bn (53%) from wine and spirits Wine and spirits value to the on trade... Spirits 6bn 24.6% Still Wine 3.3bn 13.7% 10.4bn (42.8%) in sales RTDs 212m (0.9%) Champagne 414m (1.7%) Sparkling wine 432m (1.8%) Fortified wine 43m (0.2%) All wine 4.2bn (17.3%) page 4
The WSTA Market Overview LWF 2015 Most popular drinks in the UK At home Red wine White wine Lager In a pub Lager Ale Cider In a restaurant Red wine White wine Lager and to the off trade... Still Wine 5.3bn 33.1% 10.9bn (68.4%) in sales Spirits 4bn 25.2% RTDs 228m (1.4%) Sparkling wine 783m (4.6%) Champagne 328m (2.1%) Fortified wine 274m (1.8%) All wine 6.6bn (41.8%) page 5
The UK Alcohol Industry Employment Wine & spirits directly and indirectly support 554,000 jobs Youth employment The hospitality industry helps young people get in to work... 46% of the hospitality work force are under 30 33% are under 25 page 6
The WSTA Market Overview LWF 2015 The on trade UK bars, pubs, 123k restaurants & hotels Wine and spirits are worth 5.8bn 36% of all sales to UK pubs and bars and... 3.4bn to hotels & restaurants 74% of all sales The changing face of the on trade With changing consumer demand the drinks mix of new premises is changing. Nearly half of the value of all drinks sold in new pubs, bars and restaurants are wine and spirits. 2014-2016 Spirits Beer Wine Soft drinks Closures 22.9% 46.8% 16.5% 13.8% Openings 25.7% 37.3% 20.5% 16.6% (+2.8%) (-9.5%) (+4%) (+2.7%) page 7
The Wine Story The Wine Story The wine industry generates 20bn in economic activity 10.9bn in sales 5.9bn in duty and VAT paid by consumers 9.5bn in total contribution to the public purse (duty, VAT, corporation and income tax) The wine industry s worth 6.6bn to shops and supermarkets and 4.2bn to bars, pubs and restaurants page 8
The WSTA Market Overview LWF 2015 The wine industry s exports The UK wine market is the 6th largest wine market in the world. It is also the 2nd largest trader by volume (behind Germany) and by value (behind USA). The wine industry s consumer 60% of UK adults drink wine. This is the equivalent of 31m people. page 9
The Wine Story The wine industry as an employer 172k people are directly employed in wine and 105k are employed in the supply chain 600m bottles of wine are bottled in the UK The socially responsible wine industry page 10 Wine bottles are 30% lighter than they were 7 years ago, helping cut emissions
The WSTA Market Overview LWF 2015 The English and Welsh wine industry 503 vineyards 133 wineries 2,000+ hectares under vine in England & Wales 2015 (2,801 full size football pitches) 5.06m bottles produced in 2015 10m the estimated number of bottles produced by 2020 100m estimated value of the industry page 11
The Spirits Story The spirit industry generates 30bn in economic activity 10.4bn in sales 4.9bn in duty and VAT paid by consumers 8.2bn in total contribution to the public purse (duty, VAT, corporation and income tax) The spirits industry is currently worth 4.2bn to shops and supermarkets and 6.2bn to bars, pubs and restaurants page 12
The WSTA Market Overview LWF 2015 The spirits industry exports 1.6bn litres were exported from the UK to foreign markets in 2015 1.25bn 178m 44m bottles of whiskies bottles of gin bottles of vodka The spirit industry s consumer 48% of UK adults drink spirits. This is the equivalent of 24m people. page 13
The Spirits Story The Spirits Story The spirit industry as an employer 172k people are directly employed in spirits and 105k are employed in the supply chain The socially responsible spirit industry Emissions of CO2 from distillers has fallen by 94,000 tonnes since 1999. This is the equivalent to taking 30,200 cars off the road page 14
The WSTA Market Overview LWF 2015 The British spirit industry 273 registered distilleries in the UK... 11 131 13 118 New distilleries in 2016: 12 % change since 2015 0 England +30 N. Ireland Scotland 0 +10 1 27 Wales +8 Total +17 page 15
A Responsible Industry A responsible industry Removals from the market 1.3bn units of alcohol removed from the UK market by industry 150+ irresponsible products removed from shelves by the Labelling Ensured 80% of alcohol product labels contain unit information Please drink responsibly 91% contain a warning about drinking while pregnant drinkaware.co.uk page 16
The WSTA Market Overview LWF 2015 Consumption in litres per head (+15) 11.6 11.4 11.0 11.1 10.8 10.1 10.1 9.9 9.6 9.4 9.4 9.5 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 18.1% fall in consumption from 2004 to 2015 62% of young people (11-15) have never tried alcohol (up from 38% in 1988) 8% of young people drank alcohol in the last week (down from 25% in 2003) 89% of people have heard of units (up from 79% since 1997) 2 2 1 page 17
Taxation 67% of all alcohol duty paid in 2016 was from the wine and spirit industry... 7.3bn Others Wine + 3.5bn VAT 3.58bn 4.06bn 33% 37% Spirits 3.25bn 30% In 2016, wine and spirits contributed an estimated 17.7bn to the Treasury (VAT, duty, employment and corporation tax) That s the equivalent of 347 per UK adult UK wine duty is the 3rd highest in the EU UK spirits duty is the 4th highest in the EU 15 page 18 EU states have a 0% duty rate to support their wine industries
The WSTA Market Overview LWF 2015 Rest of EU UK 40.6% of all alcohol duty collected across EU member states is collected by the UK Chancellor Since 2008, wine taxation has increased 62% Spirits taxation has increased 47% page 19
Taxation Current UK duty tax wine gin 5.47 avg price Duty 2.16 75cl 56% tax 13.66 avg price Duty 8.05 (40%) 76% tax vodka 12.60 avg price Duty 7.54 (37.5%) 77% tax blended whiskies 12.78 avg price Duty 8.05 (40%) 80% tax page 20 Tax= duty + VAT
The WSTA Market Overview LWF 2015 Sources The UK Alcohol Industry CGA Strategy EY HMRC Home Office WSTA Market Report Q2 2016 YouGov The Wine Story English Wine Producers EY IWSR WSTA YouGov The Spirits Story EY HMRC IWSR YouGov A Responsible Industry Department of Health HMRC ONS Portman Group Taxation EY HMRC page 21
About About the IWSR The IWSR quantifies the global market for alcohol by volume and value, and provides insight into short-term and long-term trends. Globally, we track overall consumption and trends at brand, quality and category level for wines, spirits, RTDs, beer and cider with the aim of providing data that is as accurate and detailed as possible. Our unique methodology allows us to get closer to what is actually consumed and understand better how markets work. The IWSR researchers conduct face-to-face interviews with 1,500 companies around the world, tapping into local expertise, with further input from 350 companies. Please note that the following figures are preliminary and may be subject to change. For more information on this or any other IWSR data please contact graziella@theiwsr. com. page 22
Wine Exclusive data from the IWSR LWF 2015 UK wine sales 2012-2016 2012 2013 2014 2015 2016-1.8% -1% -0.6% -0.1% -0.4% 143,697 142,375 141,356 141,195 140,575 (000s of 9L cases) UK wine sales by category 2016 Light Wine Since 2015-1% Since 2012-5% Sparkling Wine Since 2015 +7% Since 2012 +37% Fortified Wine Since 2015-3% Since 2012-17% page 23
Data from the IWSR UK still wine sales by country of origin in 2016 Country of origin 000s 9L cases % change from 2015 1 Australia 25,038 0 2 USA 16,713 +1 3 France 15,144-3 4 Italy 14,658-5 5 Spain 12,587-2 6 Chile 11,116 +3 7 South Africa 9,524-5 8 New Zealand 5,182 +2 9 Argentina 3,153 +10 10 Germany 2,380 UK still wine sales by colour -15 000s 9L cases Market share 43% Red 51,728 % change v 2015-2% 45% White 54,379 0% 12% Rosé 13,575-2% page 24
Wine Exclusive data from the IWSR LWF 2015 UK sparkling wine sales by origin in 2016 Country of origin 000s 9L cases % change from 2015 1 Italy 7,138 +12 2 Champagne 2,595 +2 3 Spain 1,929-15 4 United Kingdom 300 +8 5 France 291-17 6 Australia 288-4 7 USA 92-11 8 Other 190-6 9 Total 12,820 +3 10 Total ex. Champ 10,226 UK fortified wine sales 000s 9L cases +4 Market share 52% Sherry 1,069 % change v 2015-4% 46% Port 954 0% 2% Other 42-2% page 25
Data from the IWSR UK spirits sales 2016 Flavoured spirits 17.7% Scotch whisky 17.7% Gin 11.1% Vodka 29.6% Brandy 6% Other: US Whiskey (5.8%), Irish Whiskey (1%), Tequila (0.9%) Rum 10.1% Vodka Flavoured Spirits Scotch Whisky Gin Rum Brandy US Whiskey Irish Whiskey Tequila 000s 9L cases 9,804 5,866 5,836 3,691 3,334 1,982 1,922 340 291 % change from 2015 +3 +1 +0.4 +9 +8 0 +25 +10 +13 page 26
Exclusive data from the IWSR LWF 2015 Data compiled and designed by: www.wsta.co.uk International Wine & Spirit Centre 39-45 Bermondsey Street London SE1 3XF Selected data kindly supplied by: www.theiwsr.com 39 Moreland Street London EC1V 8BB If you have any queries please contact Ciaran Myles: ciaran@wsta.co.uk 0207 089 3880 page 27
The Wine and Spirit Trade Association International House, 39-45 Bermondsey Street London SE1 3XF Registered number: 410660 England Limited by Guarantee www.wsta.co.uk info@wsta.co.uk +44 (0)20 7089 3877 @wstauk wstauk