The UK alcohol ingredients market is value at US$1.102 billion in 2019. At currents prices, the final consumption expenditure of households pertaining to alcoholic beverages was in the order of £ 21,551 million during 2019, which is an increase from the £ 21,278 million registered during 2018 and £ 19,806 million registered during 2017 [Source: OECD]. Further, household expenditure as a percentage of total household expenditure of the United Kingdom, during 2017-18, pertaining to alcoholic drinks (away from home) was in the order of 1.4% which was the same during 2015-16 and 2016-17. Further household expenditure as a percentage of total household expenditure related to alcoholic drinks (brought home) during 2017-18 was 1.5% which was the same since 2013. Besides, the total value of UK manufacturers' product sales amounted to £396.6 billion in 2019, a decrease of 1.2% when compared with £401.4 billion in 2018. However, the largest increase in product sales was reportedly from whisky, which was reportedly up by £0.4 billion to £4.1 billion. Further, the total UK Manufacturers' Product Sales pertaining to Distilling, rectifying, and blending of spirits accounted for £ 5,001 million which was an increase from £ 4,633 registered in 2018 and £ 4,132 registered in 2017. Delving further into this industry, it is important to note that sales of Gin and Geneva (EXCLUDING alcohol duty) accounted for £ 6,47,011 thousand during 2019 which was an increase from £ 6,15,732 thousand registered during 2018, among others [Office for National Statistics, UK]. Also, as reported in September 2020, British passengers traveling to EU countries will be able to avail duty-free shopping from January 2021, which reportedly implies that UK excise duty will no longer be due on alcohol and tobacco bought when leaving Great Britain. Further, new inbound personal allowances will be applicable allowing passengers to bring back with them 42 liters of beer [ equates to three crates of 568ml (pint) cans; in case of 330ml bottles of beer it equates to 5 crates]; 18 liters of still wine (2 cases) and 4 liters of spirits or 9 liters of sparkling wine, fortified wine or any alcoholic beverage which are less than 22% ABV [Source: The Government of the United Kingdom]. Therefore, from the aforesaid market conditions, it can be conclusively discerned that the production of the alcoholic beverage will be facilitated and is consequently poised to drive the UK alcohol ingredient market growth.
Besides with UK alcohol consumption leading to 358,000 admissions to hospital in 2018/19 which was 6% higher than 2017/18 and 19% higher than 2008/09 as reported on February 2020 [Source: United Kingdom National Health Service] a restraint in the consumption of alcohol is expected. This development is expected to hamper the volume sales, however, is poised to be offset by the “less is more” preference where consumers are increasingly keen on drinking less alcohol but aren’t willing to compromise on the quality. This suggests that consumers are expected to spend a little more on a reasonable volume of higher quality alcoholic beverages. Also, with growing preference for rustic taste imparted by the likes of Rhum Agricole, the trend for “something pure and fresh” which is prevalent among aficionados is expected to permeate to all strata of consumers. Before all foregoing, the profusion of craft breweries is another development which along with the aforesaid is expected to drive the market for the UK alcohol ingredients during the forecast period.
AB MAURI UK & Ireland (Associated British Foods plc)
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