There is no doubt that in the last two years, several things have happened which have affected the fortunes of English and Welsh wine.
Plantings continue to grow at 300ha to 400ha a year and after planting this year (2025), the total area under vine will have passed 5,000ha. This means that if we had a yield such as we saw in 2018 or 2023, we would be looking at a production in three to four years time of around 35 million bottles.
Just harvesting an average yield would produce around 22 million bottles. Either way, this is nearly three to four times what is currently being sold and even if sales increase over the next few years (which they ought to), they are unlikely to rise enough to meet the anticipated level of production. This means that stocks of (mainly) sparkling wine will grow from the current level of 30-40 million bottles (my estimate), to maybe 50-60 million bottles, or around six to seven times annual sales.
Whilst these look like large numbers, the current stocks of Champagne are now over five times annual sales, and for prestige Champagne cuvées the stock levels are much higher. However, the estimated low yield in England and Wales of 2024 of around six to eight million bottles will have the effect of lowering stocks for producers, which in one sense can be seen as a good thing, but for the 30%-35% of growers who just sell grapes, low yields mean low income.
The cost-of-living crisis, the 25% cumulative inflation since 2018, the rise in the price of energy caused by the war in Ukraine and its knock-on effects, plus rising interest rates have all raised the cost of wine production, nibbling away at margins and have reduced net income as never before. Finally, the number of vineyards for sale, surely an indicator that their owners wish to get out of the business, has never been greater. These include the biggest of them all, Chapel Down, major producers, Gusbourne, Three Choirs and a larger number than ever of smaller producers. Hambledon, another major producer, was taken over by its creditors as it was effectively bankrupt. Taken together, these factors paint a somewhat negative picture: too much wine, not enough sales and cash getting tighter.
However, I believe that whilst we are going through a period where things will be tight, we have been here before. Between 1993 and 2003 both the planted area and the number of vineyards fell by 27%. Several large vineyards (as well as many smaller ones) went under as they couldn’t sell their wine at anything approaching a profitable price, their stock expanded, and cash-flow dried up. The wines, almost all still and made from German crosses and a few hybrids (most notably Seyval blanc) just didn’t appeal to the wine-buying public who were heading for wines from Australia, New Zealand, Chile and eventually South Africa. But not all vineyards went under and when excess stocks had been reduced, and when plantings of today’s four major varieties (Chardonnay, Pinot noir, Meunier and Bacchus) doubled from around 27% of plantings to almost 50% and came into production, things started to improve. Added to that, the first releases of sparkling wines from the likes of Nyetimber, Ridgeview, Chapel Down and Lamberhurst started hitting the shelves and gaining plaudits from both wine writers and wine retailers, the feel-good factor returned, and we headed for where we are today. I thought it would be useful therefore to set out the pros and cons of where the industry that I am proud to have been a part of for the last 50 years, is today.
Pros
Quality
The quality of GB’s main product – sparkling wine – has never been higher and the old question ‘is it better than Champagne’ has long been laid to rest many times in many tastings. The rise of the £100+ bottle of GB sparkling wine has shown that we can also challenge the very best from anywhere in the world. As sparkling wine constitutes 75% or more of English and Welsh wine production, this is a critical factor, and a very, very positive one.
Still wines
Still wines, although lagging behind sparkling in terms of quality, are getting better and a few producers have shown that decent still whites made from Chardonnay in a Chablis style can be produced with some regularity. It is my belief that if this style of wine can be replicated in enough volume and priced reasonably (for a white Burgundy style wine) it offers a way to make money out of still wines. It’s interesting that Jackson Family wines appear to be more interested in still than sparkling and have chosen south Essex, home to many of today’s top still Chardonnays, as their base. I really do not believe that lower priced still wines (£10-£12 a bottle) of even a modest quality can be produced profitably, given our climate, our yields and the production costs that most wineries have. Low (or lower) alcohol still wines, which come naturally to a cool region like England and Wales, might be an interesting category in the future.
Availability
The rise in availability of English and Welsh sparkling wine, brought about by the increase in vineyards in production and in yields per hectare, means that it is now a product that is of interest to both national and local wholesalers and distributors, especially those dealing with hotels, restaurants and clubs for whom having an English sparkling wine on their list is now nothing very unusual.
Tourism and direct sales
Most producers have long known that direct sales to tourists, wine enthusiasts, others who call at the vineyard, really can be the lifeblood of almost any vineyard of any size. People buying wine in wine shops, supermarkets and other retail outlets are put off buying ‘expensive’ wine in case it is no good and they have been made to look a fool by buying a wine that they knew little about and hadn’t tried. This is why seemingly expensive wines sell at high prices once the customer has tasted them. This factor is not going away and almost every vineyard I know selling direct report that sales volumes rise year upon year.
New entrants
The arrival of Domaine Evremond’s first release (due Easter 2025) will undoubtedly give all English sparkling wine producers a useful bit of publicity. It has been 12 years in the making, but finally it is here.
Taittinger, who are 51% owners, and Hatch Mansfield, their agents who are also significant shareholders, have the size and marketing know-how, to stay the course, weather the storm (if that’s what it becomes) and see things out. England and Wales have also attracted other overseas investors such as: Vranken-Pommery, a major Champagne house, who first planted in Hampshire in 2015 and now have 40ha under vine on their Pinglestone Estate; Henkell, the worlds largest sparkling wine producer with multiple brands in many countries, who bought Bolney in 2022; Jackson Family Wines, one of the world’s most successful wine producing companies who own around 50 different wine producers and over 5,500ha of vineyards around the world, and who have invested heavily in land in Essex, some of which they planted in 2024; and MDCV, owners of Chateau de Berne and other estates, who have several UK vineyards which together total almost 400ha. These are only the major investors.
I could have mentioned the unnamed South African wine producer who has planted 40ha of vineyards in the south east; one of the largest fruit growers who has also planted 40ha in order to provide Lidl with an own-label still wine; and a few others with overseas wine interests who see England as a worthwhile place to invest their money. 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.
These are all (or at least mostly), well established, well financed wine companies who have been in the business for decades, even centuries. They know that wine is a cyclical industry, yields go up and yields go down, and stocks need managing. What they also know is that they are investing at what could be the very start of what could well become one of the world’s finest sparkling wine regions. Champagne has 34,300ha under vine, England and Wales around 5,000ha. I still think we have a way to go.
Cons
Cash flow
The 2023 harvest, where yields for many vineyards, especially the best in terms of production, were three to four times higher than usual, showed that in order to be in, and 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 2023 harvest.
Low yields
By comparison, the 2024 harvest, which will undoubtedly be one of the lowest yields per hectare since the disaster that was 2012, showed that growing grapes in a marginal climate like ours can be a risky business.
Whilst coming after the bountiful 2023 harvest it might not be such a shock as it otherwise might have been, it still means that 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).
It is my estimate, derived from the evidence collected over the last nine years of yield surveys, that a majority of English and Welsh vineyards have average yields that are lower than the value of grapes harvested. Of course, selling grapes as wine may yield more in the long term, although given the cost of production for smaller growers who have to use contract winemakers, and given the costs of storage, both physical and in terms of interest on stocks, this is debatable.
Vineyards for sale
The Financial Times, in its last weekend edition of 2024, devoted articles to two things wine-related: the rise of vineyards in Ireland; and the problems facing English and Welsh wines. Neither was especially well-informed or factually accurate, but the latter article headed Have English Winemakers Lost Their Sparkle did have some interesting views and comments.
“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”.
Whilst 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).
How has this happened? In the twenty years between 2004 and 2023, the area under vine in England and Wales grew from 761ha to 4,211ha, an increase of 5.5 times. In the same 20 years, those well-britched 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.
In most cases, the vineyard labour is subsidised – themselves, plus family, friends and neighbours. 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.
Many vineyards were planted on the ‘because it was there’ site selection principal which sees a lovely multi-bedroomed house with expensive-to-maintain outbuildings which occupy the same site as the vineyard and neither compliment each other, making both a difficult sell. Finally, the real value of the vineyard can only be based upon its earning ability and cannot reflect the amount of capital spent on it, however much the proud proprietor would like it to be. It seems certain to me that many of these smaller ‘hobby’ vineyards will eventually be grubbed.
As I said above, I believe we are facing a difficult period for winegrowing in England and Wales but firmly believe that the positives outweigh the negatives. 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. Quite a few vineyards will probably change hands, with the amalgamation of some of the biggest to help with economies of scale. Let’s see what things look like in five years’ time.
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