Strong GBP and harvest means UK wine buyers will seek quality over price this year

By Gemma McKenna

Published: 11 February, 2014

The UK market is likely to have a wine buying process driven by quality rather than price this year, says one expert.

Justin Knock MW, consultant at CobevCo, says record harvests and the strengthening pound have put New World wines in a "fascinating position" this year.

Knock said the record harvests from Chile, California, New Zealand, South Africa and "large positions in Argentina and Australia" would normally mean "a real downward squeeze on prices amongst these countries".

But for the first time in four to five years the GBP is strong against all the local currencies - last year only the Rand was weakening against the GBP. Add to that Europe is recovering from a low stock position, and Knock said: "I can't really see one country doing better than another based on supply issues alone".

Large harvests, combined with the strong pound, mean UK buyers will seek out quality first this year, says Justin Knock MW.

"For the first time in a while I think we have a situation where the UK market will have a buying process driven by quality competition rather than price competition. Everyone needs to get some profit back in the chain and the strong British pound will enable that, while delivering lots of purchasing power to secure quality wine which is available in spades across the new world countries."

Knock attributes the strength from the New World coming from the planting boom of the 1990s and 2000s which has now consolidated supply, as well as ensuring some top quality fruit is being produced.

"The best 80-90% of those vineyards remain, and those vineyards are now 10-20 years old, they are in the prime of their productive life and have reached their quality potential as well. The last time we had oversupply from the New World it was with masses of weak quality wine from young vineyards. This is completely different."

He also predicted that in Europe Spain will once again be popular, while France will struggle given its smaller volumes and lower quality. As for Italy, it has "slightly better volumes but it's of all the things the market isn't really looking for (which is still Pinot Grigio and Prosecco)".

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