Increase in duty continues to stifle PPS category

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Related tags: Premium packaged spirits, Beer, Lager, Tax

The extra tax burden imposed by Gordon Brown earlier this year is continuing to stifle expansion of the premium packaged spirits category according...

The extra tax burden imposed by Gordon Brown earlier this year is continuing to stifle expansion of the premium packaged spirits category according to figures released by data monitor analyst, AC Nielsen.

For the first time since the "alcopop" scare in the late 1990's, on-trade PPS sales had declined between August and September, six months after Gordon Brown slapped an extra eleven pence on a bottle.

Graham Page, consultant for ACNielsen, said: "There was some evidence that the level of growth prior to the Budget was starting to cool down but the Chancellor's decision has moved the peak forward by several months.

"The fact that sales were down during August and Spetember is quite extraordinary considering that this time last year the PPS sector was growing at around 60 per cent in the on-trade."

There was also little to cheer about in the beer market which is still in decline, albeit slower than last year.

Mr Page added: "The annual absolute decline of beer has slowed down to around one per cent but ale is still having a torrid time and lager is only being buoyed by the rise in premium lagers, especially the packaged variety which has benefited from the wane in PPS sales."Wine is continuing to perform in the on-trade and is showing strong growth while the other big climber has been new style spirits.

"Young drinkers are not drinking traditional spirits such as whisky, gin and cognac like their parents did. Speciality spirits and imported spirits are performing well driven by the likes of Archers and Jack Daniel's."

Related topics: Legislation, Ready to Drink

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