UK’s emerging still wine category ‘hampered’ by duty hikes, WineGB says

WineGB continues to lobby the government on its alcohol duty reforms, director Sam Linter tells db, as the emerging still wine category is being “hampered now” by the changes which came into effect on 1 August 2023.

Linter, chair and director of WineGB, told press yesterday at the trade body’s annual tasting that demand for British wines, both still and sparkling, continues to grow.

Sales by volume of British wine were actually down in 2022 to 8 million bottles, from 9.3m the previous year, which WineGB chalks up to changes in purchasing habits following the Covid-19 pandemic, but the trade body was positive about the growth of still wines.

“English sparkling wine is now established as our main category, and people are now looking wider than that to see what else is on offer,” she said. As such, “we are seeing a trend in the growth of still wines in the UK.”

The average price of Pinot Noir and Chardonnay grapes grown for still wine production is rising, Linter said, with the growth of still wines burgeoning in particular areas of Great Britain.

“Essex is seeing really strong growth for still wines. I think you’ll see that in Suffolk and norfolk as well, but other areas are making really great still wines as well – Kent, Sussex, Hampshire.

Linter believes the movement towards still wine production is a sign of “the industry growing up”, but noted there is still a long way to go.

Nick Wenman, WineGB‘s vice-chair, who is the founder and owner of Albury Organic Vineyard in the Surrey Hills, said that while “there are some great still wines” now being produced in the UK, quality is inconsistent at volume year on year.

Exports rose to 7% last year, an increase on 4% the year before, and sparkling wines are leading the charge there.

“Undoubtably the thrust in exports will be sparkling wines, and it will be some time, in my view, before still wines start competing on an international stage,” Wenman said.

Overseas demand shows no signs of slowing, Linter said. “We’re working with the department for business and trade and their partners, and they are channelling an increasing number of export opportunities our way,” she added, thanking the department for its ongoing support. “We really are now seeing good support from government on these areas,” Linter stressed.

However, with domestic sales as high as 93%, UK duty reforms are having an impact on the industry.

Linter told db that it was “too early to say” what the extent of this impact will be, as the reforms came in just over a month ago, but said WineGB would have a clearer sense of how things are playing out next year.

“It’s a ‘watch this space’ for us,” she said. “It’s something we are concerned about. one thing I know producers are looking at is whether to start making alcohol levels slightly lower going forwards, to hit just under 11.5%. Is that right for the wines? This is a question that is being asked.”

WineGB continues to lobby government about the reforms, which have seen the biggest single alcohol duty increase in almost 50 years.

“They are selling a good story that we’ve had sparkling wine duty reduced. That’s great, and thank you very much for that, it’s really helped our industry. But you’ve got this emerging still wine sector that’s being hampered now, so how can we get support for that?”

Wine producers are not able to apply for the Small Producers Relief scheme launched as part of the reforms, as it only applies to alcoholic beverages with an ABV of 8.5% or lower.

“If we could be part of the Small Producers Relief scheme, that would give us some help for some of the sales of our still wines, which would be really useful,” Linter said. “”We really need to keep lobbying government to be part of that, and I think that would really help.”

New reforms have seen all alcoholic drinks taxed depending on their ABV. Vice-chair Nick Wenman makes the argument that as a “cool climate” country, British wines will be less adversely affected.

“We’re a cool climate, and therefore are not producing wines at 14% or 15% alcohol. We’re likely to be producing still wines that are 12% or less, especially our rosés. If you’re selling a bottle of wine at that percentage at £20 a bottle, then the increase in duty is fairly marginal,” he told db.

“If you’re selling something that’s 16% alcohol, at a lower price, then all of a sudden that becomes much more of a factor. That doesn’t happen as far as British wines are concerned,” he added.

Yesterday’s trade tasting displayed 300 wines from 67 different producers, representing 75% of UK production and sales.

WineGB also introduced its new CEO Nicola Bates, who will enter her role at the end of October. Bates, who is currently strategy and external affairs director at the Portman Group, comes from a background in politics, and ran for election in Sheffield Hallam as a conservative candidate in 2010. She told press yesterday: “My politics has changed very radically since then”.