Price not a factor in British drinking habits

- Last updated on GMT

Related tags: Alcoholic beverage, Drinking culture, Alcoholism, Datamonitor

British drinkers are among the biggest spenders on alcohol in
Europe (£1,272 per person per year - almost twice as much as the
Germans), not least because of the high duty rates there. But new
research from Datamonitor shows that the social aspect of
drinking is so important for British consumers that they are
willing to put up with the higher prices charged in the on-trade -
even though supermarket prices are always lower, writes Chris
Jones.

For details of how to order your copy of Datamonitor's report
click here.

Britons spend more than two-thirds of their drinking money in pubs, bars and restaurants, according to Datamonitor's report, with per capita consumption through the on-trade reaching a whopping 110 litres in 2003 - and this despite high prices and limited opening hours compared to the rest of Europe.

"The British attachment to drinking out of the home stems from the long-standing pub culture. Pubs are places where ordinary social restrictions are loosened, it is easier to meet new people and inebriation is more acceptable than at home. For most other Europeans, drinking alcohol is not a matter of getting drunk but of enjoying life - as a result, drinking good wine in one's own home signifies comfort and pleasure,"​ said Andrew Russell, consumer analyst at Datamonitor and author of the report.

But with little sign of a reduction in duty rates in the near future (the latest Budget saw increases for both beer and wine, for example), British drinkers will inevitably become more price conscious when it comes to buying alcohol, contributing to a predicted 18 per cent increase in off-trade alcohol purchases to £23 billion by 2008.

This is also being aided by the increasingly important role played by the supermarket sector in driving the wine market in the UK - wine is still relatively rare in pubs, and the choice is often limited, whereas supermarket wine shelves are becoming increasingly crowded, and it is here that most consumers learn most about wine, through shelf labelling and in-store tastings and advice.

But perhaps the biggest change in the UK alcoholic drinks market will be the liberalisation of opening hours, which is expected to introduce a far more Continental-style drinking culture, and in particular reduce the levels of binge drinking - where drinkers try to consume the largest amount of alcohol possible in the relatively short time before the pub closes at 11pm.

It is primarily due to this binge drinking culture that volumes of alcoholic drinks consumption are highest in the UK compared to the rest of Europe, but in terms of pure alcohol intake, Britons are in fact well down the league table. Total annual consumption of pure alcohol intake in the UK stood at 12.2 litres per person in 2003, according to Datamonitor, compared to almost 16 litres in Germany and 15 litres in France.

"Britain's low alcohol consumption seems at odds with the widely reported binge drinking culture. The truth is that only a minority of Britain's drinkers are binge drinkers - but this behaviour is concentrated in city centres and on weekends, maximising its impact on society. By contrast, the higher alcohol consumption in Europe is less intense, reducing drunkenness, public order issues and other negative effects of alcohol consumption,"​ said Russell.

The desire to introduce a more European drinking culture - thereby reducing social problems related to alcohol - was of course the main driver behind the liberalisation of opening hours in the UK, which is being phased in over the next year or so. But Datamonitor suggests that there are signs that binge drinking might already be on the wane.

The market analysts predict that total consumption of alcoholic drinks when going out will fall to 110 litres by 2008, partly due to the rise in health awareness and the ageing of the UK population, but also because of a more responsible attitude on the part of the on-trade itself. For example, pub trade J D Wetherspoon recently decided its two-for-one promotions in a bid to clamp down on binge drinking.

Binge drinking was also associated mainly with weekends, when consumers are better able to sleep off the inevitable hangover, but mid-week drinking is now playing an increasingly important part in British alcohol culture that the bingers are becoming ever scarcer.

The increase in mid-week drinking is again due to changing demographics, according to Datamonitor. "While going out for a drink used to be the reserve of young adults, a new crowd is joining in,"​ said Russell. "Urban singles and childless couples are rising in numbers, and they have more time and a greater inclination to go out to socialise. These new consumer groups are boosting mid-week drinking, as alcohol plays an important role in helping consumers to relax and unwind."

Datamonitor forecasts that the number of mid-week drinking occasions will increase at an annual compound rate of over 3 per cent by 2008. "Consumers like to have a drink to mark the change between work and leisure, giving rise to the rapidly growing post-work drink phenomenon,"​ Russell added.

These new drinking occasions will help maintain growth in on-trade spending, albeit at half the rate of the off-trade, and on-trade consumption levels will remain high: according to Datamonitor, per capita consumption of alcohol in the UK on-trade 112 litres - over twice as much as the French and almost three times that of Americans.

On-trade spending, on the other hand, is expected to increase by almost 6 per cent, the report said, indicating that consumers are trading up to premium and novelty drinks.

But despite the proliferation of on-trade drinking opportunities, it is the at-home market which is likely to offer drinks manufacturers the greatest opportunity in the future, according to Datamonitor.

As the average age and earning power of consumers rises, and as people invest more in their home, staying-in and entertaining at-home occasions will become more frequent, increasing by between 3 per cent and 5 per cent per year, according to the analysts. Entertaining at-home occasions are particularly interesting: although they are comparatively rare, consumers spend as much on drinks for an entertaining at-home event as they do in bars or restaurants when going out - an average of almost £10 per occasion in the UK and £6 in the rest of Europe.

"Although the on-trade currently dominates post-work drinking, the arrival home from work is also something of a transitional moment - the opportunity to 'shut the door on the world' and enjoy one's own home. As consumers develop ever more comfortable homes, the desire to relish the fruits of their labours grows. For many people a drink at home, of good wine, spirits or a refreshing beer, is a way of marking the pleasure they take simply in being in their own home,"​ concluded Russell.

Related topics: Retail & Shopper Insights

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