PRICING!

3 min 15 sec read
Yes - it's that time of year again - BLACK FRIDAY! 
This is when we discount with different percentages OFF our current retail prices dependent on values but almost everything is a 'DEAL'.
Our current retail prices are set from our invoice cost prices over the last few months.
You've heard me bang on about price increases over the last 2 years already. (Check out this) So I won't go into detail but bullet point below the issues the wine industry has faced through every link in the supply chain over the last few years. 
2008 BANKING CRISIS, BREXIT, COVID & lack of recycling leading to increases in raw material costs ENEGRY PRICING post Russia invading Ukraine leading to increases in shipping &distribution costs minimum wage increases and, most recently, Employers NI increases. In short, we've had to manage a lot of disruption over the last few years.
However, as I predicted with my blog earlier this year, it's about to get a lot worse!!
At the spring budget on 1st March 2023 the UK government announced the biggest increases in alcohol duty that we've seen in the last 50 years, effective On 1 August 2023, however, almost immediately the industry benefitted from temporary admin relief - a concession from the government that suggested they didn't think the hikes were practical?! 
Effectively, at the moment all wines between 11.5% and 14.5% pay the same duty (£2.67 per bottle). However, this relief is due to end on 1st Feb 2025. When this happens, each wine will be charged according to it's individual alcohol percentage to 0.1%.
Apart from causing a hell of a lot more admin to each link in the supply chain - there will be 2 major changes to take into account -
  • Higher alcohol wines will become much more expensive as they will have to pay more duty on importation.
  • Supermarkets and bigger volume businesses will continue to push wineries to work back from set retail price points, forcing wineries to reduce alcohol levels, which will affect taste, intensity, structure, flavours, complexity & length of wines - thus accelerating the race to the bottom by the major retailers - All the more reason to use independent wine merchants if you're looking for wines with flavour & balance.

 MY KEY MESSAGES ARE THUS:

  1. WINES WILL BECOME MORE EXPENSIVE IN 2025 - PARTICULARLY THOSE WITH HIGHER ALCOHOL LEVELS - SO BUY NOW WHERE YOU CAN. 
     
  2. BIG RETAILER WINES WILL BECOME LOWER IN ALCOHOL, THUS LOWER IN FLAVOUR, AND SEEM MORE DILUTE.
     
  3. SUPPORT SMALLER, LOCAL, INDEPENDENT TRADERS WHO UNDERSTAND THE VALUE OF WINE.

 

Cheers, 

Alan

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