Sales Slide in the UK
Bacardí — the owner of major spirits brands including Bombay Sapphire, Bacardí rum and others — has reported a continuing decline in UK sales, with volumes falling further compared with the previous year. The most recent reporting shows a UK sales slide of nearly 7%, with worsening sell-out performance. (The Grocer)
Key Factors Behind the Decline
Bacardí has publicly blamed rising duty pressures and broader macroeconomic conditions for contributing to weaker sales performance:
- Alcohol duty increases have made spirits relatively more expensive for consumers, especially in retail and on-trade venues like pubs and bars, suppressing demand. (The Grocer)
- Ongoing cost-of-living pressures among UK consumers mean discretionary spending on premium spirits has slowed, with many buyers trading down or moderating their drinking habits. (Drinks International)
- Shift in consumption patterns — such as growth in lower-alcohol and no-/low-alcohol beverages — is diverting some market share from traditional spirits. (Drinks International)
Industry Context — Duty Pressures and Broader Market Trends
Duty Burden Impact
- The UK’s alcohol tax regime has been a significant point of stress for producers and retailers alike, with duty rates rising and remaining high relative to other European markets. Retail and hospitality stakeholders have argued this has constrained sales and put pressure on venues serving alcoholic drinks. (Hansard)
Sector-Wide Declines
- Broader industry data shows the spirits category in the UK — along with wine and overall alcohol volumes — has been in decline in recent years, not just Bacardí. For example, total UK spirits volumes dropped by around 5% in 2023, amid excise duty changes, cost-of-living constraints and moderation trends. (Drinks International)
- A recent analytics update revised downward the UK spirits outlook for 2025, with projections suggesting volumes could shrink further year-on-year, partly due to duty and consumption shifts. (Drinks Retailing)
Bacardí’s Perspective & Industry Reaction
While Bacardí points to external pressures — especially duty hikes — as a factor behind declining UK sales, it’s important to note that:
- Some industry commentators see these declines as part of broader cyclical and structural shifts, not limited to Bacardí alone. (Drinks International)
- Rising duty burdens have also been linked to changes in consumer behaviour, where shoppers trade down to cheaper alternatives or reduce overall consumption. (Drinks International)
At present, Bacardí’s comments reflect stress across several fronts — tax, consumer affordability and changing drinking patterns — all contributing to continued sales pressure in the UK market. (The Grocer)
What This Means for the UK Spirits Market
Rising duty pressures are widely seen as a significant headwind for spirits brands operating in the UK:
Higher duties tend to push up prices for consumers, which can dampen demand. (The Grocer)
Trade bodies argue this may erode competitiveness and limit growth potential, especially in premium categories. (Hansard)
The broader downward trend in UK alcohol volumes suggests that Bacardí’s experience is not isolated but part of a larger pattern of weaker consumption. (Drinks International)
Here’s a case-study and commentary breakdown of the situation around Bacardí citing rising duty pressures as UK sales continue to decline, showing how this isn’t just a single data point but part of a broader market trend — with examples, business responses and expert reactions.
Case Study 1 — Bacardí’s UK Sales Decline
Background
Bacardí, the global spirits group behind brands such as Bacardí rum and Bombay Sapphire gin, has reported that UK sales have slid by around 7%, with sell-out volumes falling year-on-year. The company has publicly linked this decline to multiple pressure points — especially rising alcohol duty along with broader economic challenges and shifts in consumer behaviour. (The Grocer)
Key Factors
- Rising Duty Burden:
Bacardí points to higher alcohol duties in the UK as a significant factor dampening demand, pushing up retail and on-trade prices and prompting some consumers to trade down or cut back. (The Grocer) - Macro Pressures:
Company insiders and industry observers also note cost-of-living pressures, inflation, and changing drinking preferences (e.g., moderation and lower-alcohol options) as adding to the decline. (The Grocer) - Market Trends:
Data from industry analysts show the overall UK spirits market shrank by about 5% in 2023, with categories like gin down double-digit percentages — highlighting that Bacardí’s experience reflects broader market weakness rather than an isolated brand issue. (Drinks International)
Business Impact
- Prices at retail and in pubs and restaurants have risen as a result of duty increases passed on through the supply chain, potentially reducing impulse and discretionary purchases of premium spirits.
- Higher duty costs are harder for global brands than for no-/low-alcohol products or lower-strength alternatives, where duty is lower and demand is growing.
Company Comment (Paraphrased from Reporting):
Bacardí representatives have stated that the combination of macroeconomic headwinds, consumer spending constraints and rising duty costs are key headwinds affecting their UK performance. (The Grocer)
Industry Comment:
Analysts argue these issues have systemic effects on spirits volumes, suggesting Bacardí’s drop is part of a sector-wide pattern rather than isolated missteps. (Drinks International)
Case Study 2 — Broader Duty-Driven Market Adjustments
Alcohol Duty Changes
UK duty policy has been adjusted in recent years to keep rates in line with inflation, meaning spirits, wine and other alcoholic products have seen higher excise duties rising with RPI inflation in successive budgets. This increases costs for producers and typically translates to higher shelf prices for consumers. (GOV.UK)
Example — Wine & Spirits Duty Trends
Trade bodies such as the Wine and Spirit Trade Association have publicly criticised ongoing duty increases, warning they could suppress sales volumes and weaken competitiveness compared with countries with lower tax burdens. One WSTA comment described the duty uprating as disappointing and potentially prolonging economic weakness for producers and the hospitality sector. (Château Bauduc)
Market Response
Some producers and retailers have adapted in ways that illustrate how duty pressures shape strategy:
- Lower-strength products and no/low-alcohol alternatives have grown as duty on these products is often lower, leading some firms to shift portfolios. (Drinks International)
- Some importers and foreign producers (e.g., Spanish wine exporters) have seen exports to the UK fall sharply due to higher duty burdens making their products less competitive, reinforcing wider duty-linked sales impacts across categories. (Vinetur)
Comments & Industry Perspectives
Retail / Trade Analysis
Analysts note that while volume declines have been observed across spirits, premium segments sometimes fare better than mainstream labels, as cash-strapped consumers trade up on fewer occasions or opt for drinks perceived as offering better value for money. (The Grocer)
Policy Commentary
Political and policy discussions in the UK Parliament and industry circles have framed the duty issue as a double-edged sword — on one side helping public health objectives and revenue, but on the other potentially reducing overall sales and harming hospitality businesses. Some MPs have warned that high duty rates risk pricing out the UK market and undermining jobs in pubs and bars. (Hansard)
Trade Body Response
Trade associations, such as the Wine & Spirit Trade Association (WSTA), have been vocal about the impact of duty burdens. For instance, one WSTA leader described rising duty as “disappointing and short-sighted,” arguing it may prolong market weakness — a clear industry pushback against government policy. (Château Bauduc)
What This Means in Practice
- Case Conclusion: Bacardí’s acknowledged UK sales decline is not merely a brand issue but reflects macro pressures exacerbated by government duty policy, economic environment and changing consumer preferences.
- Market Pattern: Similar sales weakness across spirits and related categories suggests that pricing pressures from duty and inflation are broad-based, not unique to Bacardí.
- Industry Views: Retailers and trade bodies see duty as a critical factor influencing competitiveness, pricing and consumer behaviour, with some arguing for targeted reliefs or adjustments.
Summary Table
| Aspect | Impact |
|---|---|
| Bacardí UK Sales Decline | ~7% drop linked to word-of-mouth from company on duty pressures and macro headwinds. (The Grocer) |
| Industry Volume Trends | UK spirits market down ~5%, indicating wider category weakness. (Drinks International) |
| Duty Policy Changes | Duty uprated with inflation and structural adjustments, raising costs for producers and consumers. (GOV.UK) |
| Trade Commentary | Industry bodies criticise high duty rates for suppressing sales and competitiveness. (Château Bauduc) |
| Consumer Impact Trends | Shift towards lower-strength/no-low alcohol options and value-focused consumption. (Drinks International) |