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Wine Production in the UK - Industry Market Research Report

United Kingdom wine production market: £79.4 million industry in 2013

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2014-02-24 17:12:01 - Wine Production in the UK - Industry Market Research Report - a new market research report on

Although wine has been produced in the United Kingdom since Roman times, wine making has been little more than a hobby during modern times. During the past decade however, a number of major international awards caused the world to taken notice of English wine. Wine is produced in the south and south east of the country and is mainly of sparkling wine in the Champagne style.

During the past five years, the industry has enjoyed robust growth, underpinned by rising domestic and international interest in English wine. Warmer than average weather for much of the past decade improved grape yields and wine quality, helping winemakers produce sparkling wines to rival any on the continent. Interest in UK-produced sparkling wine has also



been helped by rising demand for quality food and wine.

Industry revenue is projected to increase a compound annualised rate of 7.9% over the five years through 2013-14 to reach £79.4 million, including growth of 2.1% in the current year.

Despite strong growth in revenue, profitability has grown at a much slower rate than revenue. The United Kingdom is a high-cost wine producer compared with other larger producers. The cool climate, relatively low yields and lack of scale and scope of production result in high costs and low margins for local wine producers. The inherent risk and volatility of the industry has also been highlighted by the sharp falls in wine production witnessed since 2011-12, following extremely wet and cold weather. During 2012, leading producer Nyetimber was forced to scrap an entire harvest. This is not expected to impact the industry until 2014-15, when the 2012 harvest would have reached supermarket shelves.

The Wine Production industry has a bright future ahead, with demand for UK-produced wine expected to grow strongly over the five years through 2018-19. Revenue is forecast to contract in 2014-15 as producers lose sales following earlier weather driven declines in production. The industry should bounce back strongly thereafter as the reputation of English sparkling wine on the international stage continues to rise and consumer demand for locally produced, high-quality products stimulates domestic sales. Forecast warmer than average global temperatures should benefit winemakers, boosting grape yields and industry profitability. IBISWorld forecasts industry revenue will increase by a compound annual rate of 3.5%.

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Mike King
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