Multibuy ban has worse long-term impact on wine

Published: 10 April, 2012

Results from Scotland suggest the government's proposed ban on multibuy drinks promotions could have a worse long-term impact on wine sales than in beers and spirits.

Exclusive figures, released to Harpers by Nielsen, reveal there was a five percentage point swing in light wine since Scotland outlawed multibuy offers in October, with beer now recovering to pre-ban sales levels.

The figures are potentially worrying to the UK wine trade, in light of the government's announcement last week that it will consult on introducing a multibuy ban south of the border as part of its Alcohol Strategy.

It states a ban on multibuys "would put an end to any alcohol promotion or sale that offers customers a discount for buying multiple products, and therefore those that encourage and incentivise customers to buy larger quantities than they want".

Nielsen's Gavin Humphreys said that while beer has steadied itself after a "notable decline" in the wake of the multibuy ban, in Scotland it was now in line with pre-ban performance at -2.5% in sales. Wine, however, has fallen from 1.4% (year to October 1, 2011) to -3.9% in sales (25 weeks to March 24, 2012). In the same period, wine volume sales in England and Wales fell from -2.5% to -3.5%.

While Humphreys admitted "you can't categorically put this down to the ban on multibuys - but it's quite a big shift and just too much of a coincidence".

But the data from Scotland suggests that as the wine offers have dried up, people have switched out of the category. Humphreys warned: "I am sure there has to be some impact here that if introduced in England and Wales would also have an impact."

"We are seeing less use of the multibuy mechanic in favour of straight price reduction [in Scotland], as shoppers look to control spending."
He added that it would be "extremely abnormal for consumers to buy three wines at £3.33 - you just don't need to".

Steve Barton of Brand Phoenix, said increasing duty had already made the three-for-£10 mechanic unviable. He agreed with Nielsen figures, saying if the ban on multibuys was extended to the rest of the UK "you would find a disproportionate decline in wine versus beer and cider".

How the ban could affect by-the-case discounts
A multibuy ban could also have a serious impact on wines offered at a discount in cases, the bread and butter of many mail-order and online retailers. Glenn Caton, managing director at Laithwaites Wine, said that while the company was in favour of minimum pricing, "legislation that prevents selling a multi-bottle case at less than the per-bottle price of an individual bottle is quite a different matter".

"When used responsibly, a bulk-buying discount can help encourage people to try different, more premium wines. Stopping retailers doing this would have a massive impact on wine sales that could put some of the more vulnerable producers out of business."

To read more on this issue, and a full analysis of the Alcohol Strategy, see this week's edition of Harpers.

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