Wine price rises may test consumer loyalty
Published:  17 June, 2008

Wine prices will rise by 10 per cent over the next year in an attempt to absorb duty rises and currency changes, Majestic chief Tim How has said.

How, who is due to leave his post as Majestic chief executive, also told reporters on Monday that bottles of wine in the £6-7 range may go up by more than 10 per cent – around £1.

His comments came as Majestic announced a three per cent rise in both sales and pre-tax profit, driven by the growing popularity of fine wine.

Several industry figures have predicted price rises in the wake of this year’s Budget, which saw chancellor Darling add 14p to a bottle.

The prospect puts retailers and suppliers in a tricky position as consumer spending power becomes curtailed by costly bills and a worsening economic climate, however.

Almost two-thirds of off-trade consumers say price is the most important factor when buying alcohol – up from 51 to 63 per cent in the last year, a new report from Deloitte claims.

Tim Wilson, director of Deloitte’s consumer business practice, said: “This is a significant shift from the past two years when more than half of consumers said that brand was more important than price.”

Some in the wine industry disagree. A recent survey of 1,000 regular wine drinkers by Wine Intelligence found that wine would not be “one of the first items to be thrown out of the trolley”.

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