Dominic Buckwell on cost v quality
The question I am asked most frequently after ‘what is your favourite wine?’ is ‘why are English wines so expensive?’ After that comes ‘are they worth it?’
Given that so many imported wines are available for under a tenner, and English wines are never this cheap, this is a fair challenge. I reckon it’s time to explore the complex relationship between price and value.
Whether something is worth what it costs depends on objective as well as subjective factors: you have to ask ‘to whom, when and where?’ Economists will talk about opportunity cost, scarcity, supply and demand, all of which are relevant considerations.
But one thing is clear: English wines are made on a relatively small scale, compared with those produced by the behemoth international brands that line our supermarket shelves. And this makes the price per bottle relatively higher.
The following illustration (with thanks to Gavin Quinney) shows that paying less than £10 for a wine delivers very little in terms of the cost element pertaining to wine itself. Whereas trading up to the price of your local vineyard’s finest will increase exponentially the value of the wine component.
However if you go above the £30 mark, the proportionate increase in returns are less, as you are then paying either for desirability created by marketing, a very limited supply outstripped by demand, or both. The price per bottle for your average Sussex wine (still or sparkling) falls within the sweet spot of value for money, assuming of course it is something you actually enjoy drinking.
England is a newcomer to producing quality wine. The industry has grown from obscurity at the start of the millennium, to more than 1,000 vineyards with 10,000 acres of vines today. Two thirds of production is classic-method sparkling wine, which takes at least two-to-three years to make. Most sells for £20-30 per bottle, less than most well known Champagne brands, but is judged just as good and is produced on a much smaller scale and more locally. 83% of English still wines sell for less than £20 per bottle. While expensive by comparison to the bulk supermarket wines, it is more comparable to other smaller-scale imported wines sold in specialist shops and merchants.
Sussex has 130 vineyards. The vast majority are artisanal, owner operated and run on a hand-to-mouth basis. The average size holding in England is ten acres, and 80% of producers have fewer than a dozen, meaning manual rather than mechanised tending and harvesting of vines is required. An example is the five-acre vineyard Tickeridge in Blackboys. It is run by a former primaryschool teacher (Zena) and her husband (Tony), who consciously decided to limit the scale to a level they could manage by themselves without needing to employ anyone else. Operations on this scale, like others in the area, such as Beacon Down, Off The Line, Hidden Spring, Oastbrook and Breaky Bottom produce around 20,000 bottles in a good year, which can support a five-figure pre-tax income. This is no great fortune but represents an honest living for a hard-working couple.
Our cool, damp climate means that our vines yield less, and demand more money to tend than the vast majority of vineyards which are situated in warmer, drier regions. In 2023, the UK imported 16.4 billion bottles; that is more than 700 for each one we made by ourselves. With climate change and increased planting this ratio is reducing, but remains a huge imbalance implying overall demand for the limited supply is easily met.
The troika nations of France, Spain and Italy produce around half of the world’s wine from vineyards which are several times as productive for various climatic reasons, such as being less prone to mildew. The top ten wine conglomerates (mostly American and Australian) accounting for 15% of global production, each produce more than 100 times the entire UK production. On such a scale, the production costs are in pence per bottle, whereas the yield, costs and scale for English producers mean none can manage less than about £8 per bottle. Add a modest £4 profit margin for the producer, a margin for retail (30-50%), excise duty (£2.67) and 20% vat and the price of £20-30 seems perfectly fair and reasonable.
Even at these prices, the accounts of the largest Sussex producers (Nyetimber, Rathfinny and Ridgeview) and their peers in neighbouring counties Kent and Hampshire (Gusbourne and Hambledon respectively – which have been up for sale) make interesting reading: the common denominator is that they have all made eye-watering, eightfigure capital outlays, and continue to suffer seven-figure cash flow losses, year on year. Having done some rudimentary maths, I calculate that each bottle you drink has probably been subsidised by the owner by at least £10. They are actually paying you to drink it! It is a bit like eating game that someone has paid a lot more to shoot than it costs you to buy.
Profit margin, costs, supply v demand all play a role in determining the price, but value is a matter of perception to the consumer. I can pay several times as much for the exact same wine in a restaurant than in a shop, and the level of enjoyment – which corresponds to my perceived value –will be determined largely by factors entirely external to the wine itself: who I am with, where, the conversation, music, lighting, ambience etc. There is evidence from research by Professor Charles Spence and others about how contextual factors profoundly influence the wine-tasting experience and the drinker’s sensory perception of quality and value.
At its best, wine – like art – is a cultural artefact, expressing the place where it is from and people who make it. I remember the first time I experienced English Sparkling Wine in 2001, a Ridgeview Bloomsbury, from Ditchling in Sussex: the pride I felt that we had our own delectable fizz, and surprise that it came from my grandparents’ village. Then came sharing the knowledge with friends, near and far. Its value to me was beyond doubt worth the cost.
Sharing wine and food with friends and for entertainment is about impression. So much so, that when choosing a bottle to take someone, you tend to become conscious of a lower limit: you don’t want to appear too cheap. Similarly, for a few wealthy owners, there is an attraction in having their own wine, grown on the ancestral estate, or land newly acquired for that very purpose. The investment pit is bottomless. Will the brands they have built eventually pay back the cost? This is a question to be answered by the next generation.
English Sparkling Wine is no more expensive than the average Champagne. Both are made from the same predominant grapes (Chardonnay, Pinot Noir and Meunier) in the same classic method of bottle fermentation aged on its own fine lees. England’s reputation has been built on its high-quality sparkling wines rivalling Champagne.
Research reports by Wine Intelligence (now part of IWSR Drinks Market Analysis) concluded that before Covid more consumers regarded English Sparkling Wine than Champagne as ‘excellent value’, and fewer considered it ‘poor value’ than they do Champagne. During Covid, direct sales of English wines rocketed as more people sought out their local suppliers when normal shopping routines and supply chains were disrupted.
Today you might find an ‘own label’ (ie generic) Champagne cheaper than most English Sparkling Wines, but those are either loss leaders sold below the actual cost of production, or from mega-large cooperatives where the wines are a blend of numerous different unidentified producers, who, unlike anyone in England, produce wine collectively on an industrial scale. The cooperative Champagne you often see in retail chains called ‘Nicolas Feuillatte’ is an example of the latter, drawing from an acreage around twice the size of all the vineyards in England combined. Even with its record 2023 harvest, total English production remains less than that of any one of the famous Champagne houses such as Moët, Lanson, or Veuve Cliquot, or the Argentine family-owned Catena Zapata.
If there is one single point to stress, it is that production of English wine remains minute by international standards. So comparing like with like in terms of producer scale for English v imported wines, the pricing for quality of small and artisanal is comparable. No one is making much money, and so far the larger the operation the larger the losses. Indeed, as the saying goes: ‘to make a small fortune in wine you need to start with a large one’.
So, in conclusion, I believe it to be a myth that English wine is more expensive than its benchmarks. Comparing price to mass-scale producers is not like for like, and the demand for English wine so far meets supply.
Oh, and my personal favourite wine? If it’s not an English Sparkling, then I generally prefer white to red wine, preferably something full bodied with a kiss of oak: ideally a blend of vineyard plots on Hermitage Hill in the Northern Rhône, a white Rioja or Bordeaux.