Britons expected to expand ‘pandemic trend’ of drinking at home

Britons struggling to keep up with rising living costs are unlikely to quit a glass of wine on the sofa at night, the head of Australia’s largest listed wine producer says.

Tim Ford, chief executive of Treasury Wines Estates, which owns brands including Penfolds, Wolf Blass and Lindeman’s, said rising global inflation and rising household spending were putting pressure on lower-end wines. wine market.

But in the UK, inflation has climbed to 40-year high of 10.1%, Ford said there was no sign that consumers were cutting back on wine spending. “We haven’t seen that shift in the UK yet. The price point of £6 to £8 a bottle is still pretty strong,” he said.

Ford predicts that household consumption of low-end wine will prove resilient.”This epidemic trend has really stalled,” he said, referring to how people Start drinking more at home After bars and pubs were closed due to the lockdown.

During the pandemic and the 2008 financial crisis, household alcohol consumption increased in many markets, including the UK, according to Phillip Kimber, a consumer analyst at E&P Financial Group. “Supermarket sales are going crazy,” he said.

However, Kimber warned that the company is not recession-proof because of lower demand for its high-margin wines sold in bars and restaurants. “In a severe recession, corporate credit cards are restricted and spending on fine wine is hit,” he said.

Ford said Treasury Wine Estates will not raise prices on budget brands because the market cannot absorb the higher costs, although the winemaker has raised prices on some popular luxury and premium brands. “These are not just lazy price hikes. We can only do it if there is demand,” he said.

TWE suffers devastating blow in China Introduce punitive tariffs China was its most profitable market in November 2020, and the company was forced to restructure and cut costs to deal with the impact of tariffs.

TWE’s full-year results to June 2022 showed pre-tax profit growth of just over 4 per cent to A$372.9 million (US$259 million).

The business grew in the second half as its plans to target the US, UK and non-Chinese Asian markets including Thailand, Malaysia and Singapore were implemented. “Geopolitics aside, it’s been an exciting year,” Ford said.

TWE has been operating in China and will launch a Chinese version of Penfolds next month. Shares of TWE rose 4% after the results.

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