Wine sales plummet in recession

20 May 2009

While wine sales were flat in South Africa it appeared that wine sales were worse in the UK, with the amount of wine being bought in pubs and clubs shrinking by as much as 1% - adding up to 12 million bottles during the last year, said Colin Collard, chairman of the Wine-of-the-Month Club, South Africa's largest direct wine marketer, on Tuesday, 19 May 2009.

This follows on from an earlier report that growth in wine sales in Britain had come to a standstill, and that according to market research company Nielsen, off-trade sales in the four weeks to May 2008 were down 5%, or about 4.5 million bottles, compared with the same period in 2007.

According to figures now published in the UK magazine, The Grocer, the fall had been mirrored by other sales in retail areas such as supermarkets, convenience stores and garage forecourts. All are reporting drops in sales.

The latest report showed that garage forecourts sold 6% fewer bottles, while off-licence sales showed a 9% drop in volume and a 6% fall in sales value.

"While the UK is being hard hit," said Collard, "sales in SA are also down, but not as bad as over there.

"Our wine club membership numbers are not rising at the moment. We are weathering the current storm very well. A number of local producers, however, have had export orders cancelled - not because of low quality or bad service, but simply because of difficult trading conditions in our main export markets.

"It's not true that people are driven to the bottle in difficult times. They drink less, or buy cheaper. When times are good they drink more.

"With some well-known restaurants going out of business, local on-consumption sales are down. In the case of off-consumption sales, consumers are buying cheaper brands. Expensive and up-market wines that were difficult to get hold of, or that were available only on allocation, are now more readily available.

"At the moment there is too much 'talking down' of the market. People are not buying simply because they think they should be cutting back. It's an overreaction. Sales may have stagnated for the moment, but they will pick up soon.

"Even though things are tough at the moment the local industry has never looked better. The 2009 wine harvest has been very good and our winemakers are making wines that are better than they have ever been. Overall, SA continues to offer wines that are among the best value for money you can find anywhere in the world."

The Wine-of-the-Month Club - with 30,000 regular wine clients - also offers the public a number of other popular direct order 'clubs', including brandy, olive oil and coffee clubs. The wine club remains its biggest source of revenue.

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