UK consumers deserting cheap vino?

Drink less, drink better. The average bottle of UK wine now costs £5.11, thanks to increased taxation and VAT. But British consumers are also choosing to buy pricier wine, despite the economic woes.

And sales of wines costing more than £7 are increasing by 16% in volume terms. Why the change?

Less = more

"With the £5 price threshold being crossed, we would expect to see volume fall, but whether or not it's a doomsday scenario very much differs by retailer and wine producer," Helen Stares from market analyst Nielsen told Off Licence News. "They may be selling less, but if it's at a more profitable price then this is surely good news.'

One retailer that is seeing wine sales surge is the Wine Society. Spokesperson Ewan Murray told AOL Money that paying "a quid or two more" for a bottle of wine can give you a considerable quality jump.

"When you consider that for every £6 bottle of wine you buy, half of that goes to the Chancellor of Exchequer - duty costs £2 and VAT costs you £1." Murray confirms that average spend is also rising, while claiming Wine Society prices have been held down in the last 12 months.

But cheap is okay

Sales of Australian wine to the UK continue to surge with total sales surpassing the £1bn mark with Italy (£830m), France (£765m) and the US (£686m) lying behind. Although Spain lay behind the market leaders, it saw total sales climb 17% in total to almost £540m.

Don't forget the cheapies. British consumers are becoming less sniffy about buying wine from retailers like Aldi and Lidl. Last year Lidl whacked the competition with a humble £3.59 Rioja that managed to outclass rivals costing up to ten times as much.

Quite an achievement given that the Coalition has the highest wine duty in Europe - up +50% in five years.

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