EU-27 Annual Wine Report 2009; Consumption to Fall Due to Economic Downturn(6)

Over the last decade the UK the wine market has experienced a remarkable expansion,
reaching almost 14 million hectoliters in 2008 (Euromonitor). However, the rage of growth
has slowed in recent years. The UK economy is in deep recession and imported goods are
more expensive. There are signs that consumers are cutting back on non-essentials, or at
the very least choosing less expensive products. In the last year, the government has
dramatically increased excise duties on alcohol. Current taxes on wines rose up to Euros
2.65 and 3.39 Euros per liters, respectively for still and sparkling wines. In addition,
government concerns about excessive alcohol consumption and its affect on health have led
to ongoing debate about a reduction in glass and bottle sizes. According to Nielsen retail
data, US wine sales surpassed France in 2008, making the US the number two supplier to
British supermarkets after Australia. This notable event is mainly due to the rise in
popularity of rosé or White Zinfandel style wines. Over 50 percent of rosé wine sold in the
UK are of US origin. White wine is the most popular in the UK, representing 46.8 percent of
all wine sold in 2008, followed by red wine at 44 percent of the market, and rosé at 9.2
percent. The expected future trend is for a continued erosion of the red wine market share
to lighter, sweeter wines. Sparkling wine is also a beneficiary of this movement, with sales
increasing by 28 percent in the last five years. Despite a gloomy economic picture, UK wine
sales are forecast by Vinexpo to achieve a 6 percent growth in the next six years.
Following a drop at the beginning of the last decade Austrian wine consumption has shown
signs of recovery. The current financial crisis has not yet seemed to affect the sector.
Austrians consume about 73% of their own production, and consumption of domestic wines,
especially in restaurants, is increasing. Over the last few years, wine consumption in
Hungary has been relatively stable, halting a decade-long slide. This trend has been
favorable influenced by increases in beer prices. While the deepening economic crisis may
negatively impact commercial wine consumption, home -made wine consumption may rise.
It is estimated that 20 percent of total Hungarian wine consumption is from home -made
wines (untaxed home produced/sold wines).
GAIN Report - E49021 Page 7 of 15
UNCLASSIFIED USDA Foreign Agricultural Service