English wine mergers ‘on the way’

“Intensive” competition in English sparkling wine will lead to industry consolidation within the next three or four years, according to Chapel Down chief executive Frazer Thompson.

Chapel Down CEO Frazer Thompson has repeated the prediction he made to db in October last year (Photo: Chapel Down)

Thompson suggested that his own Kent-based winery would be in a strong position to take part in acquisitions when competition becomes too much for smaller wineries, who he sees expanding at a rate that cannot be maintained.

In an interview in The Times, Thompson said, “There are a lot of players out there and some of them frankly have to be unsustainable”.

It mirrors similar comments from Thompson made to the drinks business in October last year, when he said, “There is very obviously going to be some form of consolidation to happen in the English wine industry. People are selling their wine far too early – when you see 2012s being sold that’s far too young for something that good.”

On the strength of Chapel Down to make such moves, he observed last year, “We’re obviously in a very strong position to consolidate. There’s £6m in cash on our balance sheet and no debt – that’s a fairly aggressive place to be standing.”

A leading player in English sparkling wine, Chapel Down recorded a 21% increase in sales in 2014 worth £6.1 million.

Chapel Down is itself expanding quickly, having recently taken on 326 extra acres that Thompson says is necessary to account for increasing demand.

“More people than ever before are coming into sparking wine thanks to the rise of Prosecco,” he told The Times.