3: The UK white spirits market
UK Market summary
In terms of the overall spirits category, gin and vodka now account for over 40% by volume and are by far the largest sector of the spirits market. [These figures vary marginally depending on data source].
Vodka has been the driver of volume growth in the UK spirits market for a number of years. It is now the highest selling spirit category in the UK by volume and sales value. Within the vodka category, premium brands have performed well but these account for only a small percentage of the market and it has been Supermarket ‘Own label’ vodka that has been the main driver of this volume growth, having developed from a low level some ten years ago to approx. 40% of the vodka off trade (approx. 29% of the total vodka market). These are predominantly produced by SMEs.
The Off Trade accounts for approx. 75% of the UK vodka market. The bottom end of the Off Trade – notably in Own Label and Cheapest on Display (COD) - has been characterised in recent years by aggressive price pressures at the retail end, therefore experiencing acute price sensitivity. It is this sector that will now be the most vulnerable to any tax increase as they have the tightest margins.
Although commentators have remarked on Gin’s renaissance for some years, there has only been small growth on overall terms. There has been some migration from 'standard' products into more premium and higher value products. More premium Own Label products have been brought to market and a number of micro distilleries are emerging.