Wine prices will ‘skyrocket’ by 10 per cent in New Year due to wet weather, wildfires and label and bottle cost hikes, makers warn
- Wine prices will ‘skyrocket’ by 10 per cent next year due to inflation costs rising
- Fuel prices rising and shortages of lorry drivers have hit many wine suppliers
- Many countries have also suffered from poor crops due to extreme conditions
- Suppliers are holding back from increasing prices until after Christmas season
Drinkers are likely to see the prices of their favourite wines ‘skyrocket’ by at least 10 per cent in the New Year due to wet weather and rising bottle costs, makers have warned.
Suppliers have been hit by increased costs of labels, bottles and other packaging, while transportation prices are also on the rise due to spiralling inflation, according to industry sources.
The cost of wine itself is also increasing as many countries are suffering poor crops due to extreme weather conditions, including torrential downpours and wildfires.
Suppliers are deliberately holding back from increasing wine prices until after the busy Christmas and New Year period has passed in a bid to remain competitive with their rivals.
But by next year, wine drinkers are likely to see prices ‘skyrocket’ with conservative estimates predicting a ‘double digit’ price rise, though wines from countries suffering the most could see costs soar even higher.
Wine suppliers have been hit by increased costs of labels, bottles and other packaging, while transportation prices are also on the rise, according to industry sources (stock image)
One supplier told The Grocer: ‘We have been absorbing everything in terms of cost increases. We haven’t been passing that on.
‘But from 1 January you’re going to see big changes. I think price increases will be advised over the next four to six weeks and you’re going to see that translating to changes in retail pricing from the beginning of next year.
‘Glass is going up. Labels are going up. The inflation at the moment is just frightening.’
He added that retailers ‘have not allowed price increases through because they’ve said the consumer will not accept a higher retail price point’.
Prosecco producers in Italy and New Zealand’s sauvignon blanc have both suffered poor crops due to wet weather.
Australia, America and southern Europe have also seen wildfires destroyed vineyards, while northern hemisphere producers have suffered from late frosts hitting yields.
Suppliers are deliberately holding back from increasing wine prices until after Christmas and New Year, but experts have predicted a double digit’ price rise next year (stock image)
On top of these pressures, the industry is also being clobbered by lorry driver shortages, rising fuel prices and supply chain pressures, hiking up wine’s transportation costs.
The cost of making bottles and labels are on the rise for similar reasons, while almost every other aspect from picking to processing to supplying have been affected.
Miles Beale, CEO of the Wine & Spirit Association said trade body members had been ‘buying stock forward, trying to keep price inflation from coming through to the consumer in the short term’.
Some suppliers may start to pass on increases in December though supermarket chains are likely to absorb these in order to remain competitive with their rivals.
Mr Beale added: ‘I can’t remember a 12 month period where there were so many challenges in so many regions.’
Wine is not the only beverage that is set to suffer from spiralling inflation, as pubs have warned that pints will get more expensive despite Rishi Sunak’s five per cent beer duty cut.
Last month, landlords told MailOnline it would be ‘wishful thinking’ to expect booze to get cheaper when the industry was being hit by rising gas prices, supply chain pressures and widespread staff shortages.
They also expressed frustration that the beer duty cut will only affect 40l kegs of beer and cider, not the 30l ones used by craft breweries.
Wetherspoon chairman Tim Martin told MailOnline he would pass on any savings to drinkers when the duty reduction comes into effect in 2023. But smaller pubs argued it would make very little different to them.
Dawn Hopkins, owner of the Rose Inn in Norwich and vice chair of the Campaign for Pubs, said: ‘There’s no way this will lead to a change in prices across the bar.
‘Prices are soaring and these changes won’t come in until 2023 anyway. It also discriminates against craft beer breweries by excluding smaller kegs.’
Wine is not the only beverage that is set to suffer from spiralling inflation, as pubs have warned that pints will get more expensive despite Rishi Sunak’s five per cent beer duty cut
In his Budget, which comes into force in 2023, Rishi Sunak also said a planned increase to the duty on lower-strength spirits, wine, cider and beer will be cancelled
Peter Tiley, who runs the Salutation Inn in Ham, Gloucestershire, said he ‘appreciated’ the government trying to help pubs but it was not enough when they were ‘dying on their feet’.
‘It is wishful thinking to expect the price of a pint to go down given pubs are under such tremendous pressure at the moment,’ he said.
In his Budget, Rishi Sunak also said a planned increase to the duty on lower-strength spirits, wine, cider and beer will be cancelled while the ‘irrational’ 28% duty on fruit ciders premium sparkling wines like prosecco will be cut.
Drinks that will see taxes reduced include Bailey’s (41p a bottle), Gordon’s gin (9p per can), and Canti prosecco (87p per bottle). The tax take on beers like Stella and Carling will remain the same in shops but dip by 3p in pubs.
But other beverages will see increases, including Cockburn’s port (£1.09 per bottle), Hardy’s merlot (35p per bottle) and Scottish favourite Buckfast (81p per bottle). It remains to be seen if retailers will pass any savings on.
MailOnline understands the Treasury is open to extending the beer duty cut to 30l kegs based on the results of an industry consultation that is now underway.
A spokesman said: ‘We intend for most draught beer for sale in pubs to qualify for the relief, including where it’s made by smaller or craft brewers.’
‘We are consulting industry on the criteria to ensure that the relief supports pubs rather than supermarkets, given that smaller kegs are also sold for drinking at home.’
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