The United Kingdom is the largest importer of wine by value in the world and the fifth largest wine market. In 2010 the market imported an estimate of 1.25 billion litres of wine.
The wine market in the United Kingdom has suffered from the economic downturn. In 2009, wine sales fell by over 2 percent due to the exchange rate, duty levels, tighter household budgets and an increase in wine prices.
Ireland is a smaller market in size with a population of 4.6 million. Before the economic downturn, Ireland’s wine market was very dynamic, with a trend towards off-trade drinking, where consumers moved towards drinking wine with a meal at home.
While this trend still exists, during the economic downturn, the Irish government saw a need to encourage spending and reduced the wine duty by € 0.60 a bottle.
Getting your product into market
The markets in the United Kingdom and Ireland are already crowded therefore any New Zealand winery wanting to succeed in the market has to have a relevant point of differentiation; a route to market; and sufficient resources to gain this distribution.
It is possible to deal directly with retailers; however, if mainstream multimillion dollar sales are the goal then the winery ideally needs a person in market, with a marketing budget.
New Zealand wines are perceived as being of superior quality and customers expect to pay premium prices for them. This positioning should be maintained to make any margin.
Regulations
United Kingdom duty rates and excise tax for New Zealand wines were set on 1 October 2011 at £21.71 per 9 litre case of still wine and £27.81 for sparkling wine.
In 2008, the duty on wine in Ireland has increased by 25 percent and is the highest excise duty on wine in the EU. There is a €2.46 flat-rate duty on every bottle, €4.92 on sparkling wine applies.
Currently New Zealand wine is not subject to EU quotas.
Opportunities
In the United Kingdom, there is a demand for lighter and fresher styles of wine. Retailers and wine journalists say there is growing demand for lower alcohol wine and the government in also keen to encourage responsible drinking.ii New Zealand wineries might be well advised to consider this trend (i.e. a 9 percent abv Sauvignon Blanc).
In Ireland, there are opportunities for wines that are in the low-end price bracket and are attractive to women with good quality flavours.
Challenges
Finding relevant points of differentiation is increasingly difficult with over 120 New Zealand wineries represented in the United Kingdom already, each with a Sauvignon Blanc. It is expected that all New Zealand wineries will have a Sauvignon Blanc, the classic exemplar of New Zealand wine.
There are at least 78 importers of New Zealand wine into Ireland according to NZW, though probably only 40 are significant.
The wine market in Ireland is more fragmented than the United Kingdom. The Irish value personal relationships and so independents do well, though multiple supermarkets are growing share.
