UK growth central to Vega Sicilia's expansion plans

By Barnaby Eales

Published: 16 December, 2016

Vega Sicilia is to increase its presence in Britain in a bid to capitalise on swelling demand for Spain and high end wines

Vega Sicilia, one of the world's top wine producers, is to increase its presence in the Britain next year in a bid to capitalise on the swell in demand and growing interest in Spanish wines and in high-end wines.

"Vega Sicilia will have a much greater presence in the UK, mainly in London, in 2017," Vega Sicilia's general manager, Antonio Menendez told Harpers.

"We need to respond in an appropriate way to the rising demand and growing interest in both Spanish wines and in great wines of the world.

The UK is Vega Sicilia's second biggest market in Europe, where it benefits from representation in the on-trade and regular purchases from wine collectors.

Vega Sicilia's decision to expand its presence in London in 2017 follows the company's decision to move the majority of its shares in its holding company, El Enebro, to Mezqual Limited in London.

Earlier this year, Pablo Alvarez, owner and managing director of Vega Sicilia dismissed reports in Spain that the move to London had been made in preparation for the sale of Vega Sicilia to outside investors.

"Vega Sicilia is not for sale, but if I said I would buy your jacket for £3 million euros [you would sell it]," he told a regional Spanish TV reporter in last August.

Vega Sicilia owns 650 hectares of vines in Spain and Hungary and plans to produce 1.5 million bottles of wine by the end of 2017.

Since its acquisition of Vega Sicilia in 1981, the Alvarez family has transformed the company into a multi-million pound business, with sales expected in 2016, to reach up to €40 million. Most of the company's earnings are from exports to 115 countries. In Spain, it maintains a membership scheme giving 3,500 members limited annual allocations of wine.

The company is searching to buy new vineyards in Europe after rejecting an offer to buy a vineyard in Bordeaux this year. It has previously attempted to acquire vineyards in Champagne and Jerez.

Vega Sicilia's tasting in London at Berry Bros & Brudd in December included the much-anticipated release of the 2005 vintage of Unico, the company's flagship red wine.

Vega Sicilia's Unico is usually released ten years after production, showing the ageing ability of the wine, but the release of the Unico 2005 had been stalled for two years to allow for the wine's tannins and acidity to mellow, the company said.

The Unico 2015 is part of Vega Sicilia's Hungarian and Spanish portfolio of wines for 2017. This includes: NV Reserva Especial 2017; Valbuena 2012; Alion 2013 from Ribera Del Duero; Pintia 2012 from Toro; and Macan 2013 and Macan Clasico 2013, both made in Rioja Alavesa in the Basque Country under a partnership with Bordeaux producer Mouton Rothschild.

Gonzalo Iturriaga, Vega Sicilia's new technical directory of vineyards in Spain, said the company had recently acquired vines in Labastida adding that trials on the Viura grape variety, in Rioja could lead, he hoped, to the production of the company's first white wine in 2017.

Meanwhile, Vega Sicilia is continuing replanting of vines - from clones to protect the vegetal genetic material - of about 40 hectares of old vines from the company's main site to the neighbouring site of Alion in Ribera Del Duero. Half of the Alion is wine is made from grapes grown outside Vega Sicilia's sites with an average age of 45 years, but Iturriaga said the replanting would enable production of the wine to be made entirely from grapes grown on the Alion site.

"Since I started working with Vega Sicilia about 9 years ago we have always experienced very strong demand for Unico and Reserva Especial. While that demand continues unabated we have genuinely seen an increasing rise in interest in Valbuena, Alion and Pintia," said Damian Carrington, Managing Director of Fields, Morris & Verdin, Vega Sicilia's UK distributor.

"Pintia has changed considerably stylistically over the last few vintages now exhibiting a real freshness to balance the power. With Valbuena, I think customers are increasingly realising that it isn't a 'second' wine and that it represents great quality in its own right," said Carrington.

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