Pricking the English Wine Balloon
The UK's wines are very good. Is that enough?
If critical praise is the only criterion by which success is measured, English and Welsh wine are flying incredibly high.
It would be hard to find a wine professional or keen enthusiast anywhere on the planet who’s unaware of the speed at which winemakers in the UK have exploited their skills, the warming climate, and English and Welsh terroir to produce sparkling wines that stand comparison with top-quality Champagne.
As a report by the consultancy Wine Lister revealed earlier this year, average critics’ scores place English sparkling wine just behind Champagne with a rating of 90.6 compared to Champagne’s 90.8, Franciacorta’s 90.1, Prosecco’s 89.7, and Cava’s 88.9.
The UK’s still wines have attracted less attention, but some of these, too, are increasingly impressive.
Money matters
Inconveniently, however, winemaking is a business. Without considerable investment, from which some kind of return is presumably expected, many of these recommendable wines could not have been produced. And without sufficient buyers for them, the short-term economic sustainability of the UK wine industry in its current shape is open to question.
Like it or not, the business pages are full of stories about struggling enterprises in a wide range of sectors that are highly regarded for their products and services. It’s why so many of our favourite brands disappear or are bought up by rivals or private equity.
Three quarters of a billion dollars
So, for the sake of this post, I’m going to treat the quality of UK wine as a given. Everything that follows is as cold-bloodedly business-focused as anything you are likely to find in the Financial Times.
So, let’s start with the investment. The explosion in English vineyards - from around 2,000ha in 2016 to possibly as many as 5,500ha today - has come at an eye-watering cost. Over the last decade alone, this has been estimated - in Strutt & Parker UK Viticulture Land Market Report (Summer 2024)- at £570m ($768m). More than three-quarters of a billion dollars.
Among the high-profile investors - though over a longer timescale - have been Berry Bros & Rudd and the port-producing Symington family who jointly bought Hambledon’s 90ha; Taittinger and its associated UK wine importer Hatch Mansfield, (with 60ha at Domaine Evremond); Vranken-Pommery, (with 40ha at Pinglestone Estate); Henkel Freixenet which bought Bolney Vineyard’s 42ha in 2022; Jackson Family Wines’ Marbury estate (27ha); Mark Dixon, founder of Regus/IWG serviced offices, with 400ha; and Wayne Pitout of Glen Carlou in South Africa’s 40ha at Chilham Estate in Kent.
Alongside these, there have been ‘British-Belizean businessman, pollster and politician’, Lord Ashcroft with the 90ha he uses for his Gusbourne Estate; former City of London financial players, Mark and Sarah Driver with 93ha at Rathfinney, Christian Seely, Managing Director of Pichon Longueville (Baron) in Bordeaux and co-owner of Coates & Seely (70ha); and the late Steven Spurrier with 10ha at Bride Valley. Earlier this year, Lord Spencer of Alresford, billionaire founder of interbroker dealer Icap, increased his shareholding of the 400ha Chapel Down vineyards to 27%.
It’s an impressive list by any standards and, as industry expert, Stephen Skelton MW, the long-standing expert on UK wine production to whom I am indebted for most of the figures that appear later in this piece, asked in an article for Vineyard Magazine in January, “Can they all be wrong? Possibly. But will they cut and run if their projections on yields and sales don’t quite work out? Probably not.”
Cheap(ish) land
What was the appeal for these various people to invest in the UK wine industry? Apart from its quality potential and that of a cool climate on a warming planet, vineyard land here is relatively cheap and plentiful, thanks in part to a lack of PDO-style restrictions. In Britain, farming land is around £15-25,000 (€17-29,000)/ per hectare, to which one would have to add a further £25-40,000 (€29-46,000) to plant and set up a vineyard. So the maximum cost might be around €90,000/ha.
The closest equivalent in France is probably in Limoux, where planted vines sell for €80-120,000/ha, but equivalent land in other sparkling wine regions like Alsace, Trento or Franciacorta could easily cost €200,000. In Champagne, the area with which English wine producers most like to be compared, you’d be paying a million or two.
The competitors’ advantage
Apart from their long track record and French or Italian vinous heritage, these regions have an advantage over the UK, however. Even with annual limits on yields imposed by their authorities, they all produce far more wine per hectare. Over the last nine vintages, British vines have delivered an average of 4.7 tons/ha. The equivalent for Champagne is 10.28, while those other French and Italian regions can produce
12-16.
In other words, even after waiting for your newly-planted English or Welsh vines to give you their first crop, it could take them another three years to yield as much wine as a plot of the same size in Trento or Alsace. And this has financial implications.
To quote Skelton, in 2024, “75% of producers will have lost money on growing their crops and the other 25% produced grapes whose value only just about covered their growing costs (but nothing more).” That year was, admittedly, a spectacularly short harvest - following on from a spectacularly big one - but the profitability of an average vintage - around 50% larger than 2024 - is not that attractive.
Higher prices
Ah, say the British winemakers, we can sell our wine for higher prices than those regions. And it’s true that the most successful English fizz is not just pricier than most Italian, Spanish or French alternatives; it is often more expensive than Champagne.
As these images - from the UK’s biggest, and most English wine-friendly premium grocery chain, Waitrose, illustrate, shoppers are expected to dig deeply into their purses for locally-produced wine.
But, how much of that wine are the English winemakers selling? And how does that compare to the amount that is being produced?
The simple answer to the first of these questions is that we can’t be precise. Unlike European countries that keep careful track of every aspect of their wine industries, the data we have is from the annual WineGB survey which, in the organisation’s own words, has “an overall margin of error of +/- 400,000 bottles… Due to survey response rates”.
In other words, 2024 sales might have been anywhere between 8.7m and 9.5m bottles - a fairly large range. For the sake of this post, I’m sticking with WineGB’s declared 9.1m in 2024, a figure that may be 3% more than the previous year, but, lower than 2021.
Apart from the flatness of recent sales, this chart tells another story. Yields vary crazily, ranging from under three tons per hectare in 2016 to over seven in 2018. This was repeated five years later in 2023, when growers harvested over twice as much fruit from their vines as they did in 2024. Managing cashflow with production swings like this can be very tricky. As Skelton noted “to stay in the business of sparkling wine, having the ability to finance large stocks is crucial. Many producers found themselves financially stretched when it came to bottling and storing their [huge] 2023 harvest.”
There has only been one point - in 2021 during the pandemic - when production and sales were aligned. Between 2017-2024, the UK industry produced 91m bottles of wine and sold 51.7m.
Need to hold stock
As Skelton points out, holding stock goes with the territory of making sparkling wine. Champagne, he says, currently has stocks that are five times its annual sales. This is undeniable, and a sparkling wine industry starting from scratch needs time to build its reserves. But only 70% of British wine has bubbles, and, of that, around 9% is not made by the classic method. So, less than two thirds is reliant on cellar-ageing and/or reserve wine. By now, sales should certainly be better than flat or falling.
Judged by recent performance and the speed at which the production side of the equation has grown, the imbalance between production and sales is likely to grow.
Of Britain’s 4,841 hectares of vines referred to in the latest WineGB report, 609 are not yet in production. Skelton believes that the real figure is “now well above 5,000 ha, maybe 5,500 ha.”
He estimates that, in three or four years time, “if we had a yield such as we saw in 2018 or 2023, we would be looking at a production… of around 35 million bottles… Just harvesting an average yield would produce around 22 million bottles
If the global wine industry and the UK and world economies were all booming, more than doubling sales within five years would be still be hugely challenging. Britain is a notoriously price-conscious market, where cheap Prosecco and Cava and private label and/or discounted Champagne dominate the sparkling wine market. Revealingly, as the WineGB report shows, cellar-door sales (19% of the total) fell in 2024, for the second year running. This does not bode well for the claims that sales to wine tourists will be the answer for UK wine.
Exports, which now make up 9% of all sales, on the other hand, grew encouragingly by 35%. The biggest overseas markets at present are Scandinavia, the US and Japan, followed by the Netherlands, Switzerland, and Hong Kong, though here again, precise figures are impossible to obtain. While European wines are subject to 15% Trump tariffs, the position of UK wine remains uncertain, despite the signing of a US-UK trade deal.
Building exports
When considering export markets, UK producers will need to consider that, for a buyer in Singapore, San Diego or Stuttgart, their sparkling (and still) wine is facing a wide range of other high quality competitors. The British critics’ ratings collected by Wine Lister may show domestic fizz as being only 0.2 points behind Champagne, but it’s also only 0.5 and 0.9 ahead of Franciacorta and Prosecco. Hardly a strong lead, especially when you consider that these scores came from British critics, and both Italian styles are significantly cheaper.
Further grounds for modesty are offered by the 2024 results of the respected UK-based Champagne and Sparkling Wine World Championships which is chaired by Champagne expert Tom Stevenson from the UK, and judged by him and the Finnish MW, Essi Avellan, and George Markus from Hungary.
In a list of winners including Dom Ruinart, Dom Perignon and Charles Heidsieck, the Chairman’s trophy went to an Tasmanian wine, the House of Arras 2006 E.J Carr Late Disgorged, while the Sparkling Wine Producer of the Year was Ferrari Trento and the top organic fizz was Dominio de la Vega 2021 Nº23 from Spain. Only eight English wineries took part in the event and, of these, Gusbourne, Camel Valley and Simpsons all picked up gold medals. But none was named as a world champion.
Another factor UK producers face is that they have fewer obvious routes to market than traditional European wine producing nations which have instant access to French restaurants and Italian delis. No wine retailer or restaurant has any more need to list an English wine than one from Australia or Austria.
Wineries facing challenges
A number of prominent UK wineries are clearly not doing very well.
In 2023, Hambledon England’s 70-year-old oldest commercial vineyard, was sold to Berry Bros & Rudd and Symington Wine Estates for around £22m after failing to obtain other financing.
As Insider News reported “The Hambledon directors have ‘considered and pursued a number of ways in which additional equity and debt funding could be brought into the business from a number of potential partners but these have not been successful’…. They, and financial adviser Kinmont, are conscious that the price of the offers is "lower than the levels at which some equity has been raised".
Last year, Chapel Down (founded in 2002) was put for sale. But, in the Guardian’s words of “having failed to smoke out a buyer in four months on the block” it was taken back off the market. Family-owned Ridgeview in Sussex, another of the longest-established wineries, made a loss of £1.5m in the year to December 2023 and also reportedly considered selling up.
In 2024, as the Financial Times reported, Gusbourne and Rathfinny also went looking for new owners or partners, but without success. In the same article, the paper revealed that Hattingley Valley in Hampshire had made an accumulated loss of almost £8mn in the 13 years to September 2023 and would have to make payments to creditors that had risen from £5.6mn, up from £4.6mn the previous year.
Skelton takes issue with another Financial Times article at the end of 2024 which declared that
“Many of the country’s prominent vineyards are either loss-making or shouldering hefty debts” and “are in search of investors in order to stay afloat or of buyers willing to take on the capital expenditure required”.
In his view, “these comments are somewhat over the top and show little knowledge of how the sparkling wine industry actually works, they were prompted by some well-known land and estate agents who have suddenly realised that their all-singing, all-dancing ‘viticulture’ divisions that have been set up over the last few years are faced with the reverse of what they need for their businesses: too many vineyards for sale and too few buyers (at any price).”
But Skelton acknowledges that over the last 20 years, the “50-60 year old enthusiasts who eagerly went into vineyards and in many cases vastly overspent on their hobbies, are now 70-80 years old and want out… Their children already have jobs and have no wish to take over a business that struggles to break even, despite taking up much of the owner’s free time.”
This analysis is surely accurate, but it doesn’t apply to billionaires like Ashcroft of Gusbourne or the Drivers at Rathfinny. Of greater relevance to them has probably been a struggling UK economy, the difficulties of hiring agricultural workers since Brexit, increased employment taxes and, as real estate agent Manuel Lewis told the Financial Times, the fact that “there are businesses within the industry who took on debt when interest rates were much lower and are now struggling to service the interest.” And, for some of these well-heeled investors, being the owner of a top-class winery is simply more trouble than it’s worth.
Changing the product
One reaction to the challenges of low yields and the high production costs and prolonged maturation associated with classic method wines has been to change the nature of the product.
In 2021, only 2% of the bubbles in English sparkling wine came from charmat or carbonation. Three years later, that figure had risen to 9%, and there is every reason to believe that this will continue to grow.
The UK’s charmat pioneer was winemaker, Gareth Davies with his Fitz, made using a blend of Chardonnay, Seyval Blanc, Reichensteiner and Madeleine Angevine grapes.
Then, in 2021, Monaco-based Mark Dixon’s huge MDCV launched the provocatively named Harlot. Others have followed, including the 5ha Charles Palmer vineyard.
Alongside these alternatives to classic method wines has been Chapel Down’s carbonated efforts, including a Bacchus, and a white and rosé under the A Touch of Sparkle label.
With prices ranging from £11 for Harlot to £17 for A Touch of Sparkle and £24 for the Charles Palmer Charmat, these ‘non traditional’ efforts all offer much faster turnover at much better margins than many of the lowest-priced classic method wines.
Quite what they will do to the overall image of English wine remains to be seen. How many casual wine buyers are familiar with ‘charmat’ as a term? How many understand classic method winemaking and know that Prosecco is not made in the same way as Cava? How many will notice or understand the reference to carbonation?
A few suggestions
Name: At a time when some British winemakers are fussing over regional PDOs, the creation of a generic name for UK-produced classic-method wine, like Spain’s Cava and South Africa’s Cape Classic is now a far more urgent consideration. At least if growing and self-destructive confusion between English and Welsh carbonated, tank-fermented and Champagne competitors is to be avoided.
Charmat: By the same token, we should register ‘GB Charmat’ (GBC) as a separate product and promote it in its own right, ensuring that the two words feature prominently on labels and marketing. If English classic method fizz seeks to compete with Champagne, GBC has to stand up against Prosecco, and justify its comparatively more premium price.
Websites: Whatever it is called, Classic-Method UK fizz needs its own website to go with the identity. A site that is not bogged down in the minutiae of WineGB, but a celebratory one that communicates what these wines are about.
The same applies to GBC
Close the borders: The UK industry should make a stand against a proposed, post-Brexit, change in legislation that would allow the carbonation of imported wine. Any suggestion that these products would be easy to spot on a shelf needs to be set against the history of popular, cheap, so-called ‘British made’ wines with names like Three Mills and Old Westminster, that are actually made from imported concentrate fermented in the UK. Why imagine that similarly confusing branding might not be used for cheap Spanish bulk wine carbonated in Britain?
Promotion: Compared to other countries and regions, the UK wine industry has a pathetically low marketing and promotion budget which is funded by growers and producers. Generic wine campaigns are not always well-run or effective, but the UK cannot expect to double its sales without a lot more marketing.
London base: Before the Millennium, a lot of investment went into the launch of a one-hectare wine-experience venue called Vinopolis which closed its doors in 2015 when the owners opted for a retail redevelopment. It is time to open a new UK-focused successor. The UK capital currently has two urban wineries called London Cru and Renegade, both of which process English and imported grapes. Neither is anywhere near the tourist trail. What is on that trail is BRITYARD, the showcase for British products on Regent Street, close to Trafalgar Square. Nyetimber, arguably Britain’s top winery, has a concession space there, which is great for them. But wouldn’t it be greater if there were a place like this where a wide range of British food and drink can be sampled and purchased? Something of the ambition of the Guinness Storehouse in Dublin
Colabs: Getting a place on a retail shelf or restaurant list outside the UK is not easy, and marketing does not come cheap. Every opportunity must be taken to present these wines alongside iconic British brands like Bentley, Burberry, Purdey, Dunhill, Ettinger, Gieves & Hawkes, Mulberry and Paul Smith.
Cut the jingoism: Over the years, I’ve been confidently told - by British wine professionals - that UK wine would be ‘like Oregon’ (this piece from 2020) or ‘the new New Zealand’ (this one, from 2021). Neither seems likely, because the circumstances and timing behind both of those regions were nothing like the ones in which the English wine industry has evolved.
Finally
As I said at the beginning, English (and Welsh) wine is a success. But, as Stephen Skelton says “We are facing a difficult period…Many… smaller ‘hobby’ vineyards will eventually be grubbed… Quite a few vineyards will probably change hands, with the amalgamation of some of the biggest to help with economies of scale.”
As he continues
“We need to get stocks down to a supportable level and this can only come about by increased sales, probably at lower prices than today’s. The rate of planting will probably also slow down as grape prices ease and fall to below the cost of production.”
The UK wine industry has got to where it is today through a combination of ‘Build it and they will come”, British jingoism, and large dollops of cash from people who have made their money in other spheres.
Now it’s time for professionalism that goes beyond grape growing and winemaking.
Apart from writing these posts and working on le Grand Noir and K’AVSHIRI, the two wine brands I helped conceive and co-own, I also offer strategy and marketing consultancy and a range of public speaking.
If you think I can be of help to your business, or would just like to get in touch, please contact me at robertjoseph@winethinker.com
Thanks for this detailed and clear analysis Robert - and some precise recommendations as well. A few of us have been saying for some time that the UK is following what happened in Australia 25 years ago. Critical success, a very positive wine industry coordinating body and a bit of consumer enthusiasm was translated into a planting-driven 'boom' without any plan for how the resulting wine would be marketed. The industry there has since spent two decades trying to recover and is still suffering from the result of it. Still, I'm doing my bit in France by drinking as many as I can of the excellent wines that are being made across the channel!
This is fascinating. Thank you. Proper journalistic wine writing too with deep research and insight. It’s interesting that you note the importance of Scandinavian markets. I suspect it may be more narrow than that. Norway is a strong market. But - relative to its size - Sweden much less so. The relative strength of currencies will certainly be a factor. But there’s a momentum in Norway that’s not evident in Sweden. A weaker Norwegian Krone would be a significant blow