Beer sales have plunged to their lowest levels in 14 years, hit by the double whammy of a fall in promotions and a consumer shift to other drinks.

Off-trade sales of lager, ale and stout slumped 7.5% in volume - or 85.5 million pints - in the last quarter of 2012 versus the same period in 2011, according to figures released by the British Beer and Pub Association. At 3.7 million barrels, this was the lowest level of off-trade Q4 beer sales recorded by the BBPA since 1999.

Data from retail analysts Assosia revealed that the decline in sales coincided with a drop in featured space promotions - deals run in off-aisle locations such as gondola ends and pallets. In Q4 2011, supermarkets ran 2,204 beer and lager promotions but this crashed 30.9% to 1,524 deals last quarter, while the average saving in featured-space promotions fell from 22% to 20%.

“There’s a real squeeze on beer producers, with added duty costs and rising barley prices suggesting that they are becoming increasingly unable to justify some of the deep-cut promotions we’ve seen in the past,” said Mintel senior drinks analyst Chris Wisson.

Industry observers suggested brewers struggling to pass on rising costs were becoming less willing to help fund promotions.

Consumers were also shifting to other drinks, particularly spirits and cider. Stella Artois has enjoyed booming sales of its cider brand extension Cidre, and Molson Coors has announced it will be extending Carling into cider this March.

The BBPA figures also revealed that on-trade sales fell 4.8% year-on-year to 3.6 million barrels. With the off-trade figures, that adds up to a total drop of 138 million pints in Q4.

The BBPA has renewed calls for a review of the duty escalator, which has contributed to the tax on a pint of beer soaring by 42% since 2008.

Topics