Yahoo Finance Wine prices to surge 10pc this year
The price of wine will surge 10pc this year as scorching temperatures hammer harvests at vineyards across Europe, the owner of Laithwaites has warned.
David Gates, chief executive of the merchant's parent company Direct Wines, said that bottles from France, Spain and Italy will become more expensive if the current drought and heatwave drag on much longer.
Official government figures suggest prices of wines and spirits in UK stores have already risen more than 6pc in the past year. Mr Gates fears a further increase of as much as 4pc.
Mr Gates said: "Hot weather and low rain tends to lead to lower yields which leads to increased prices. On top of that costs of all the dry goods, so items such as bottles and cardboard, are significantly up due to supply chain and energy cost issues."
Altogether, he said the cost of wine would be up by as much as 10pc by the end of the year, bringing further pain for customers already battling a cost-of-living crunch.
Olive oil prices are also spiralling due to the heatwave in Europe, and are expected to be up as much as 25pc by the end of the year.
The expected price increase on wines come ahead of next February's Alcohol Duty Reforms by the Government, which industry chiefs have estimated could by themselves add 65p to a bottle.
Under the plans, the UK will move to a system whereby it taxes alcoholic drinks based on how strong they are, meaning red and white wines would be particularly affected. Duties on sparkling wine will be cut by 25pc to the level of still wines.
Mr Gates said wine retailers were "being bombarded from every direction with inflationary pressure; staff salaries, energy, delivery costs, raw materials and recycling costs".
On top of this, many major wine producing countries in Europe have been hit by drought conditions over the past few weeks, something which is set to slash output from some of Europe's best-known wine producing regions.
In Spain, for example, winemakers are bracing for their yield to be around 25pc lower than normal because of sky-high temperatures.
Francisco Martinez Arroyo, agriculture minister for Spain's largest wine region, Castilla-La Mancha, said the smaller harvest "will have a positive effect on the markets because the wine will be able to sell better and at a good price".
France, meanwhile, has been tackling its worst drought on record, with winegrowers warning over the knock-on effect on vines, which can withstand hotter and drier climates but can only handle so much stress.
Many winegrowers are harvesting earlier this year due to the hotter temperatures.
