Homeland News
by Joe Gilbert
Published: June 19, 2024
The UK wine industry must be “careful about spreading the message too widely that English wine is booming”, as the industry enters a potential period of oversupply and overinvestment, experts have said.
The future of the English wine sector was under the microscope at the Defined Wine event in London yesterday (June 18), where a panel was tasked with answering a question about whether the sector faces a “boom or bust” scenario.
Defined Wine chief executive Henry Sugden said he held the session partly in response to potential growing issues associated with oversupply in England and Wales on the back of accelerating farms, while also looking at how to keep the industry growing.
“There seem to be two groups: one that can't sell its wine, and one that can't sell it fast enough, which is why Chapel Down has doubled its production.
“I'm worried,” he told the audience.
“Obviously we're all big fans of English wine,” added Justin Howard Snead MW. “Nobody wants to say they're in trouble… but there are some warning signs. It's actually very difficult to sell wine. (Building a wine business) doesn't happen overnight, and I see people getting in and investing very quickly.
“Since 2010, we've had about 10% growth a year (in production at Hart of Gold), but sales aren't growing that fast. There was a little bump during Covid, where sales were up very well. But they're down again and that's not a sign Great. If we get badly out of balance, there will be a very bad market dynamic of overproduction and people panicking and going bankrupt.
One of the most important findings was that the English and Welsh wine industry has reaped the benefits of its success in recent years. Sales increased at home and abroad as planting operations accelerated to keep up with demand. However, concerns about the potential crisis intensified last year, when 2023 produced the biggest crop ever in England and Wales. More than 20 million bottles were produced in one year, while annual sales are close to 8 or 10 million bottles.
Hence, it is also expected that agriculture operations will continue to accelerate. In 1975, England and Wales had just 200 hectares under vines, rising to 850 hectares by 2000, 1,300 hectares in 2010, and 3,800 hectares in 2020.
Today, the total hectare area is 4,200 hectares, and is expected to reach 7,600 hectares over the next decade – an expected rise of 84%.
Nicola Bates, CEO of Wine GB, offered an optimistic view of the industry's oversupply issues, by pointing out that the sector itself is still relatively very young.
“The UK has more than 1.2 billion wine sales each year, of which English wine is just 10 million.
“We have different requests from the government in our new manifesto. One is a rebate on cellar door sales, like the UK does for beer. This would allow English and Welsh businesses to realize their investments in what is clearly a capital-intensive model, one that has not benefited from the New taxes.
“The number of tourist visits to wineries has doubled in the last two years, which is incredible. We have a lot of opportunities in front of us,” she concluded.
For the full report, please see the July issue of Harper's Magazine, out next week.
