UK wine industry sees dramatic rise

The number of UK wine producers has more than doubled during the last two years, based on new businesses registered with HM Revenue & Customs.

According to a report from accountancy firm UHY Hacker Young, there are now 135 UK wine producers registered with HMRC, the highest number in 20 years. In addition to the 46 producers who signed up in the 2013/14 tax year, a further 31 new wine producers registered during 2012/13.

The number of beer producers has also increased, soaring by 188% over the last five years, with the majority of this growth reported in the craft sector.

The report attributed this rise to a combination of growing consumer interest in locally sourced produce and a recent change in the tax system. April 2012 saw the government relax a previous requirement that businesses had to spend £10,000 on research and development before they could qualify for tax relief.

Commenting on the report’s findings, Roy Maugham, head of tax at UHY Hacker Young, said: “Food products such as artisan cheeses and organically-reared meats, and drinks such as craft beer and artisan spirits, have been the focus of increased demand.

“Now, we’re seeing the same thing in the UK’s once-mocked wine industry. English wines have enjoyed a genuine renaissance over the last couple of years and are now being taken seriously on the international stage.”

He also highlighted the particular appeal of the tax break for the UK wine industry, saying: “Many wine producers will be doing a considerable amount of R&D activity so the tax credits are giving them an opportunity to expand their businesses in other areas.”

Data from the English Wine Producers organisation indicates that these 135 producers currently make a combined annual total of 4.45 million bottles from the country’s 1,884 hectares of vineyard.

However, these figures look set to grow as the warm, dry growing condition of 2014 led producers to predict their second consecutive record year. Meanwhile young vineyards are steadily coming into production for larger operations such as Rathfinny, which opened its winery this year and aims to produce one million bottles annually by 2020.