Strengthening supermarkets are bypassing wholesalers
London, United Kingdom (PRWEB) January 03, 2013
The Alcoholic Beverage Wholesaling industry faces challenging times. During the past decade, several trends in both downstream and upstream markets have hurt alcohol wholesalers by constraining revenue growth and eating into profit margins. According to IBISWorld industry analyst Steven Connell, “consolidation in the beer, wine and spirits production industries has strengthened the market power of wholesalers' suppliers and customers, resulting in wholesalers being bypassed in the off-trade supply chain”. On-trade markets have also come under pressure, as falling patronage, declining beer consumption, rising operating costs, rising alcohol duties and the introduction of a ban on smoking have forced pubs to close. In addition, a major economic downturn has caused drinkers to cut back on discretionary spending, hurting sales volumes across all markets. The industry is forecast to generate revenue of £10.2 billion in 2012-13. Revenue is estimated to grow by 3.0% over the year as the Olympic Games stimulated sales over the summer. IBISWorld estimates that industry revenue will decline at a compound annual rate of 0.9% over the five years through 2012-13.
The industry will continue to struggle over the next five years. Revenue growth will be restrained by continued wholesale bypass, the rising dominance of supermarkets and sluggish economic conditions. Wholesalers will also suffer as per capita alcohol consumption declines and higher taxes and interest rates constrain consumer spending. Industry profitability will come under pressure from weak sales, rising distribution and wage costs and strong price competition. Connell adds, “wholesale bypass will continue to pose the major threat to the industry, with supermarkets' dominance of the retail space expected to result in further growth in own-label products and major distribution agreements with multinational producers that cut out wholesalers”. The industry will be impacted by the expected introduction of a 45 pence minimum price on alcohol and ban on multi-buy deals from 2013-14. Industry revenue is forecast to grow over the next five years to 2017-18.
The Alcoholic Beverage Wholesaling industry displays a relatively low level of market share concentration. Between them, the top two players in this industry account for only about 11% of industry revenue. Major companies include Matthew Clark Holdings and Diageo.
For more information on the Alcoholic Beverage Wholesaling industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Firms in this industry purchase alcoholic beverages from producers and distribute them to retailers in the on- and off-trade. This industry also includes alcohol producers that import products for distribution in the United Kingdom.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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