What Happens *If* There Is A Glut of English Sparkling Wine?

Do we really need you, bud? 

Whether people like it or not there is certainly some concern about the rate of expansion in English Sparkling Wine. It's hard to ignore, especially if there are more vintages such as 2018 in the pipeline. I'm not sure I can add anything to the debate over whether there will be a glut or not, but I think it's worth looking at a few potential scenarios:

1)A CIVC-style regulatory body. Essentially this would mean assessing the likely volumes to be released over forthcoming years and forcing producers to hold back some wine from large harvests (like 2018).

Even if the average crop over a number of years is not unmanageably large, the enormous yield variations between years could mean that there are 'mini-gluts' that exert downwards price pressure at certain times if producers have similar selling cycles (and don't put lots into reserve). If a mini-glut, lasting perhaps a year, establishes more discounting or lower prices it will be hard to recover from this in the event of a couple of smaller years (like 2015 or 2017). Production controls could prevent this happening.

However, cashflow looms large in relatively young sparkling wine businesses and most would shudder at the thought of not being able to sell their wine when they need to. Mature producers with existing reserves could adapt more easily, but there is a great deal of risk in trying to find a one-size-fits all solution for a developing industry that has fundamentally different dynamics to that of Champagne.

The idea of CIVC-style controls on vineyard yields in the UK is quite funny, and I don't think anyone would consider it. Mother Nature does that perfectly well! If there is really seen to be a grave problem with oversupply then the only logical solution is a planting ban and grubbing-up incentives - pretty desperate stuff. More likely:

2)Let it play out. I think this is probably what will happen (together with a bit of option 3-5). It's not because option 1 isn't necessarily a good idea in the long term, but because there is absolutely no way that everyone is going to agree on it at this stage. The CIVC has an intermediary role between growers and producers - there is a co-dependancy there that created the need for a regulator. In the UK producers (by and large) have their own commercial strategies which include the production of their own grapes or the financing of production under contract. The grower/purchaser dynamic does exist, but not on anything like the same scale; producers are used to being in control of the whole process.

3)Divert to other wine styles. We're already seeing this happen I believe, with a number of producers we think of as Sparkling Wine specialists making still wines from the 2018 harvest. Most sparkling sites will not regularly produce grapes ripe enough (and in large enough numbers) to make still wine that will sell at a reasonable price. Exceptional years like 2018 will bring those sites into play, but the risk is then that demand is created for wines which could be unviable (or much poorer quality) the following year. This is damaging to a producer's reputation and confusing for customers. It could also have some quality implications for the sparkling wines; every bottle of still wine is wine that isn't going into reserve. Nevertheless, if good wines can be made I'm sure this will continue to happen in certain years.

4. Diversification of the wine landscape. This has to be a positive thing, and we're already seeing it. Still wines, different fizzes from different grape varieties, Pet Nats, a resurgence of interest in some of the more maligned varieties of the past....I often say to people that I'd take a glass of Will Davenport's Horsmonden White (Bacchus, Ortega, Faber, Siegerrebe and Huxelrebe) over quite a few English Chardonnays. It's just more interesting. For those with fingers itchy to get in on the vineyard boom, the story over the last few years has been all about Traditional Method Sparkling Wine from Champagne varieties. I think there are enough rebels out there now to form a bit of an A-B-C-P brigade (anything but Chardonnay and Pinots). There are also people out there planting Chardonnay and Pinot deliberately for still wine, which is certainly preferable to hedging your bets. You really do need an amazing site, though.

5.Export A LOT more. I think this is quite likely. The Pound being terrible might help - trade wars and Brexit probably wouldn't. It's hard to look at the numbers without seeing that exporting simply has to be a much bigger part of the picture down the road. It is not easy, though, and it will take some time for the tentacles of the international wine trade to reach down to the smaller producers - they'll be busy for a number of years establishing the big players.

Comments

  1. 1. There will never be a CIVC-style control system in the UK.
    2. There will never be an agreed official 'name' for English Sparkling Wine.
    3. There will never be planting controls.
    4. You will not stop Charmat and other cheaper-to-produce sparkling wines from appearing on the market.
    5. People will continue to plant vineyards for both still and sparkling wines and worry about the financial consequences afterwards.
    6. Profitability is often the last thing on people's minds when they plant. They will worry about that later.
    7. English wines will continue to improve. Styles will develop . New products (spirits, vermouths, mixtures etc) will broaden the category.
    8. Still wine prices will fall for 2018s and depending on the size of 2019, maybe for a while.
    9. Sparkling wine prices will also probably ease, but only so far as in global terms, there isn't really that much available. Champagne makes 350 m bottles a year. UK makes on average 3 m. French drink 150+ million bottles of Champagne. Surely the Brits can drink a bit more fizz?
    10. My new book "The Wines of Great Britain" (out on May 13) will be the new "50 Shades of Grey". That was of course a wish, not a prediction.

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    1. I'm sure the people that see behind the curtain of ESW will 100% agree with everything you say. Jamie Goode's piece was an interesting read, though - it's worth examining the merits, but ultimately purely academic. If producers do have to get wine out more cheaply, though, I wonder where the corners will be cut.

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