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The Phenomenon of Low-Alcohol Wines

The Phenomenon of Low-Alcohol Wines
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Tastes are changing in the wine market worldwide.

Demand for low-alcohol and low-calorie beverages is increasing around the world, with high taxes and female drinkers said to be responsible for the rise.

The latest findings are contained in the 2012 Insight Report from International Wine & Spirit Research (IWSR), which considers the reasons for the current change in tastes – a phenomenon that stretches "from Asia to Latin America across both the wine and spirits categories."

The report says that in Europe, the switch to low-alcohol wines is mainly due to increased taxes (although health concerns do play a role). Higher taxes are said to be "having a negative effect on spending" in markets stretching from Norway and Denmark to Britain, France and Portugal, as well as the Czech Republic, Hungary, Slovenia and Moldova. As a result, producers are reducing the alcohol content to keep prices low in a climate of "price sensitivity."

The IWSR cites France, Poland, the Czech Republic and Romania as examples of countries where this is happening. In addition, it says, "the UK is seeing a surge in low-alcohol wines which are filling up the spaces vacated by full-strength wines unable to compete at the lower price points."

According to the London-based Wine and Spirit Trade Association, excise duty and sales tax account for one-half of the cost of a bottle of wine in Britain. While there is currently no tax break for still wines with 5.5 to 8.5 percent alcohol, the rates are significantly reduced for lower-alcohol sparkling wines, such as Moscato d'Asti. Those in the 5.5–8.5 percent category are subject to 1.84 pounds in excise duty per 75-cl bottle, compared with 2.43 pounds for sparkling wines up to 15.5 percent.

However, the IWSR report says that companies such as Accolade Wines, Brand Phoenix, Gallo and Percy Fox are now heavily investing in wines with less than 5.5 percent alcohol. In theory, these cannot properly be called wine, as the International Organisation of Vine and Wine (OIV) makes clear. Its definition states: "Wine is the beverage resulting exclusively from the partial or complete alcoholic fermentation of fresh grapes, whether crushed or not, or of grape must. Its actual alcohol content shall not be less than 8.5% vol." 

Even so, the low-alcohol products can be sold as wine-style drinks provided they are appropriately labeled; the excise duty applied to them is then radically reduced.

Outside of Europe, the IWSR reports that consumers are demanding "what are perceived to be healthier alternatives to full-strength products."

In Asia, for example, "Chinese women are increasingly switching from baijiu to wine as it is thought to be the healthier option. In Japan, alcohol-free beer and liqueur ranges, as well as low-alcohol mixed drinks, are fashionable, while in the Philippines ‘light’ versions of the key local brandy and rum brands are seeing significant success."

The report says that increased health awareness has also affected consumer habits in Latin America, particularly among women. It notes that many bars in Brazil are now offering low-calorie alternatives to traditional cocktails and are even using artificial sweeteners instead of sugar in the classic Caipirinha, made from cachaça (sugarcane rum). In Colombia, the launch of sugar-free aguardientes ("fire water") is a big hit, while in Mexico consumers have begun to mix tequila with sparkling water instead of the typical grapefruit soda.

Not surprisingly, the Insight Report concludes that in the United States, "the focus is also on women’s weight consciousness and health." It says that brands such as Skinnygirl are "hitting a nerve by promoting low-calorie drinks and natural flavorings."

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