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Alcoholic Drinks in Denmark

Denmark alcoholic drinks market: Volume sales decline during 2012

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2014-01-28 14:29:01 - Alcoholic Drinks in Denmark - a new market research report on

Volume sales continued to decline in the Denmark alcoholic drinks market during 2012, although at slightly slower pace than over the five year review period. Factors included consumer health concerns, tighter household budgets during the economic downturn, with many opting for "less-but-better", loss of trade to German border retailers due to high Danish excise duties, and a shift in consumption from beer and wine to spirits which is less bulky in terms of volume. Value sales however increased due to excise duty increases on wine and beer, and buoyant demand for premium brands.

Private imports brought into Denmark from across the German border have risen drastically since 2009 and, due to the economic uncertainty and new excise duty increases on



beer, are believed to have reached an all-time high in 2012. The Danes are making the journey of up to 200km to fill up the car with cheaper beer, soft drinks, and food from across the German border. High taxation and excise duties are the key reason Danish retail prices on these products are significantly higher than in Germany.

Changing consumer preference remained the key challenge for domestic beer manufactures and leading alcoholic drinks players, Carlsberg and Royal Unibrew. Females represent a proportionally larger share of consumption among younger Danes and this target group is increasingly less inclined towards beer, preferring instead ciders, RTDs/high-strength premixes and economy spirits. The "less-but-better" trend is increasingly prominent among consumers over 30 years old. This target group is shifting towards wine and premium spirits, although craft beer and speciality beer also remained popular in 2012.

On-trade volume sales recorded growth in 2012 and showed early signs of recovery from the significant slump during the depths of the economic recession. The "less-but-better" trend had a positive impact, as "drinking out" is perceived a higher-quality experience than drinking at home. Mature consumers thus returned to cafés and bars over 2011 and 2012. The impact of excise duty increases and loss of trade to German border retailers, however, saw off-trade sales decline by a proportionally larger margin than the gain in the on-trade in 2012.

Alcoholic drinks volume sales are expected to stagnate over the forecast period. Economic recovery, albeit slow, is anticipated to underpin growing sales in the on-trade channel. It will also help to diminish the German border trade trend. Sales in the off-trade channel are therefore expected to decline at a slower pace than in 2012, also helped along by wine sales returning to growth once consumers have adjusted to the higher retail prices brought about by the tax increase in 2012. The more mature target groups remain keenly interested in wine.

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