Financial Times covers the impact of inflation on the alcohol industry
According to the Financial Times, a significant decline in demand for drinks such as Scotch whisky, cognac, and tequila has led producers to face the problem of overproduction. As a result, a vast amount of alcohol has accumulated in warehouses, forcing companies to resort to conserving their factories and lowering product prices.
Currently, the five largest European alcohol producers — Diageo, Pernod Ricard, Campari, Brown Forman, and Rémy Cointreau — have stocks valued at a total of $22 billion. This is a record level over the past ten years, according to information from RBC.
During the coronavirus pandemic, when there was a surge in alcohol sales, many companies in Europe increased their production volumes. As noted by Bernstein analyst Trevor Stirling, "in 2021 and 2022, the market got out of control, and everyone thought that the increased demand would persist."
However, the sharp rise in inflation has brought the industry back to reality. The reduction in disposable incomes over the past few years has negatively affected the demand for alcoholic beverages, leading to numerous warnings about profit declines, changes in leadership, and mass shareholder exits from leading companies in the sector, as reported by FT.
In December 2025, the European Commission published its annual agricultural forecast, predicting that wine consumption in Europe could decrease by more than 9% by 2035. Analysts at IWSR (International Wine and Spirits Research) also forecast an overall decline in global alcohol consumption: beer by 0.2%, spirits by 1.3%, and wine by 2.4%.
Photo www
