Wine GB sets sights on £1bn worth of sales as further 1.7m vines planted

Wine GB marked a new phase in the future development of English and Welsh wines with its first annual tasting in London last week, revealing a raft of measures it’s taking to propel the industry forward, including proposed tax relief for cellar door sales, a new PDO system post Brexit and the provision of viticultural courses up and down the country.

Wine GB CEO David Parkinson and Wine GB chair Simon Robinson

The creation of the new body to promote the English and Welsh wines was first announced in December, following the merging of two industry bodies: United Kingdom Vineyards Association (UKVA) and English Wine Producers (EWP).

Releasing its first research survey last week, Wine GB highlighted wine tourism, the building of its global brand, vocational training for the rural economy and government support as key areas with which to support the industry’s growth, within the context of Brexit and rising exports of English and Welsh wine.

“We are working with the government and we are conscious that we need to put this industry on the agenda,” said Wine GB CEO David Parkinson, speaking to the drinks business, pointing out that often officials are not aware of how big of fast the wine industry is growing.”

“When we have a meeting and we are giving a presentation the light bulb suddenly comes on. They look at the numbers and say ‘I had’t realised it was of that magnitude’. It’s a pretty big business and it’s growing at a ridiculous rate.”

£1 BILLION BUSINESS

Last year, a total of 5.9m bottles of wine were produced in the UK, with sales increasing by 31% between 2015 and 2017, according to the Wine GB survey, which it said was “impressive” given the heavy frost damage in April 2017.

Statistics released by the Wine and Spirit Trade Association last month said that nearly 4m of those bottles were sold in the UK on- and off-trade –  a 64% rise compared with the 2.36 million bottles released in 2016, according to figures from HMRC.

Looking to the development of other New World wine regions for inspiration, Wine GB drew the strongest comparisons with Oregon, in that it too comprises “lots of small, family run operations with very few big players involved”. Assuming a similar growth pattern, Wine GB anticipates that the English and Welsh wine industry has the potential to produce 40m bottles by 2040, which would make it a £1 billion business.

Currently, the UK has 2,500 hectares under vine, with around one million vines planted in 2017 alone and a further 1.7m expected to be planted in 2018.

RAPIDLY GROWING INDUSTRY 

And while many industries are preparing for the negative impact of Brexit, Simon Robinson, chair of Wine GB and the owner of Hampshire wine estate Hattingley Valley, said Wine GB is relishing the opportunities that the UK’s exit from the European Union will afford their industry, partly because the majority of its exports are outside of the EU.

“In terms of the cost we are a higher cost producer, but if Brexit results in a fall of the exchange rate that’s a win-win,” he said, highlighting the US as the market that will “probably be our biggest market at least for the next few years,” followed by Japan and perhaps Australia, with exports of wines from the UK expected to reach £350m by 2040.

“If the exchange rate fall, it it makes foreign goods more expensive and it makes our exports cheaper in the US and other markets,” added Parkinson. “It’s difficult to crystal ball gaze, but for us we are not concerned, and we are relishing the time that we can have our own PDO system in place. It suits this industry incredibly well.”

When it comes to trade agreements, Wine GB is currently in talks, among other UK-based wine and spirits bodies, with Defra and the UK International Trade Committee, putting forth its argument for tariff-free trade.

“The big producers of wine and the US, who will probably be our big customers,South Africa, Australia and New Zealand, they will want tariff free access to our market,” reasons Robinson, “so it should be a very mutually beneficial for them to give us tariff free access to their markets. It’s the same for the EU. It makes sense to have tariff-free access in both directions. We are one of the few industries that are assaying yes, let’s get on with it – it will be a success.”

Taittinger planted its first vines in Kent last year

Investment in the English and Welsh wine industries is also growing, with Robinson revealing that Hattingley had received speculative enquiries from three Prosecco and three Cava producers, some from Germany and a few Californians investigating the prospect of coming to the UK’s shores.

Champagne Pommery has already bought a vineyard in Hampshire for its Louis Pommery England brand, while Taittinger has planted vines at its Domaine Evremond in Kent, and Californian wine giant Jackson Family Wines has also expressed a serious interest in England for the group’s next vineyard investment.

“The point that we are making is that it’s a place where they can invest in that’s clearly capable of producing a very high quality product,” said Robinson. “From their point of view it’s easy to invest in the UK. We have all the infrastructure that you could need. We have a very rapidly growing industry that’s growing fast and we are sitting on one of the biggest wine markets in the world. It doesn’t get much better than that.”

One of the most tangible changes set to take place after Brexit will be the creation of an independent PDO system for English and Welsh wines. While details of what form this system might take is still under consideration, (with Sussex a little further ahead in the process within the EU framework), Parkinson said it will “need to be in place from the moment we leave the EU”.

“We have work to do with our members and discuss these proposals with our members,” said Parkinson, emphasising that any changes would need to give producer times to ‘catchup’ with the required quality so that all producers are able to continue selling their wine in the interim.

“It will probably be introduced over a period of time. If it launched by 29 March there wouldn’t be enough time so the industry needs a phased introduction so everyone can be prepared. The quality is extremely high and improving. We want any legislation to be a reflection of that.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters