Richard Siddle, comment November 27

The talk of the trade this week has been how low will Champagne be on sale come Christmas. It has already hit £9.99 for a bottle in Lidl and there rumours we could see grand marques Champagne follow suit by the time Father Christmas takes to the skies.

The fall out from such deals is not only making headlines in the UK, but is news around the world. The state of the UK off-trade market was one of the main themes of the recent Wine Future conference in Rioja where delegates from some 58 countries heard how the UK is in danger of pricing itself out of the market for many wine producers and brands.

It does not matter which part of the industry you are in, profitability is the single biggest factor dominating business decisions now and for the foreseeable future.

How Champagne is currently being traded in the off-trade is symptomatic of how many wine producers around the world are increasingly seeing the UK market. It may be hugely influential and the so-called barometer of the global wine trade, but it is also becoming, if it hasn't already, a market many producers cannot afford to be in?

We are increasingly talking to wineries that are switching their focus away from the major multiples and into the independent merchant and on-trade sectors where they hope they can maintain margins, and, yes, keep profitability.

Producers and winemakers have been saying for years it is uneconomic to service the UK off-trade, but continued to do so regardless. It seems many have now reached their tipping point.

The simple fact is they can get a whole lot more for their wine by selling to other countries, be it closer to home in Scandinavia, Germany and the Netherlands or the emerging markets across Asia.

The rights and wrongs of pricing in the multiples we can leave to another day, but what we cannot continue to ignore is the impact it is having on how attractive the UK is as a potential market to the global wine industry. There may well be enough producers around the world willing to take part in the UK supermarket price wars, but for how much longer and at what cost to the UK trade as a whole?

• Harpers Says...