Brits get taste for a better drop

Australian wine sales to Britain have broken the £1 billion ($1.55 billion) barrier and extended their lead on second-ranked Italy as Britain's favourite imported wine, the latest figures from market analysis company Nielsen show.

And there was strong growth for more expensive wines, even as Britain splutters along in a protracted economic downturn, with sales of wines priced above £7 increasing by 16 per cent in volume terms.

The improved performance at the upper price points should comfort the larger winemakers such as Treasury Wine Estates, which has focused on its premium stable of wine brands.

The surge of Australian wine in Britain comes despite local winemakers decrying the high value of the dollar which they say hit margins as their brands are priced out of the market by new-world producers such as Chile as well as old-world centres such as Spain.

Some family-owned wineries, such as Brown Brothers, d'Arenberg and Casella, have blamed the high dollar for crunching their profitability, particularly in the crucial markets of North America and Britain.

New figures from Nielsen released on Tuesday tell a slightly different story. Australia remained in the top spot last year as Britain's largest source of wine, and in recent months extended its lead over Italy, to break through the £1 billion sales mark.

According to Nielsen, France and the US were in third and fourth place with sales of £765 million and £686 million respectively.

Spain was the fastest-growing wine exporter to Britain, with value sales up 17 per cent to £538 million for the period.

Britain's tax system helped, with taxes and duties on wine up 50 per cent in the past five years. Local retailers argue consumers are willing to pay an extra £1 or £2 a bottle to jump a few rungs in wine quality.

A recent report from Wine Australia confirmed Britain as the sector's biggest market, importing 250 million litres for the year ended March. Europe is the No.1 region for Australian exports, accounting for half total volume.