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Jerry Lockspeiser: Will 2024 mark the end of the UK wine trade as we know it?

Published:  26 October, 2023

I realise that is a pretty dramatic title. But none of us should underestimate the game changing potential of the changes the UK government intends to introduce around wine beginning in early 2024.

In case you missed it, these changes are trumpeted by Defra (The Department for Environment, Food and Rural Affairs) as a Brexit benefit for the wine trade, allowing them to scrap 400 pages of business restricting EU rules in favour of a much leaner regulatory package with far greater freedoms over how wine is produced, packaged and labelled. It will, they say, “drive investment, growth and jobs” in the UK’s wine industry. It also foreshadows a total change in what can be sold as ‘wine’.

The changes follow a period of consultation with trade organisations and have the support of the Wine & Spirits Trade Association, a body that has done a terrific job of representing the nation’s trade interest to government under the excellent leadership of Miles Beale. Which might make everything sound hunky dory. But along with unambiguously beneficial measures including the simplification of labelling for imported wines, there are some potentially market altering consequences.

The most impactful concern the relaxation of the rules around the importation of bulk wine for subsequent blending and packaging in the UK (the consultation also considered the sweetening, dealcoholisation and carbonation of such wine but these were not mentioned in the recent news release so it remains unclear whether there will be changes).

The new rules appear to mean that UK blenders can mix pretty much any wine with any other, whether imported or locally produced – different countries of origin, grapes, alcohol levels. The argument is that outside the UK wines can be blended across origins – such as across EU countries – so why not here?

It also looks like there will be no lower limit on the amount of alcohol a wine must have to be called wine, leading to zero and almost zero alcohol ‘wines.’

If, once the details become clear, these scenarios become reality, the UK market could change fundamentally - aided and abetted by the changes to the alcohol tax system already announced, where lower alcohol wines pay less tax than those with higher alcohol. Here’s why.

The everyday ‘wine as beverage’ part of the market is by far the biggest in volume. It is populated by consumers shopping with price and affordability front of mind. This is the sector these changes will most impact. Traders will be able to construct new ‘wine’ products for this market labelled as Pinot Grigio, Sauvignon Blanc, Shiraz, Malbec or any other grape, at whatever alcohol level they choose, with no country of origin. The apothecary’s laboratory looms large. The cheapest bulk wine could be sourced and blended with something better, perhaps with sweetener, acidity and so on added, to hit a specific taste profile and price point.

Apart from the challenge to off trade retailers of how to range these multi-origin creations onto shelves segmented by country of origin, the new rules should provide enormous scope for new product development. It won’t be NPD of wine as we know it today, and if combined with sweetening, adding flavours, carbonating and de alcoholising will lead to a boom in what we currently know as wine-based drinks. Both generic grape variety and product brand look set to become even more important than they are today.

Does it matter if we are heading for a seismic shift from our historic understanding of what wine is? I think the answer depends on who you are and where your business, cultural and personal interests lie.

For traditional wine enthusiasts, natural wine lovers, small wine growers, supporters of the concepts of terroir, soul and place where wine is an expression of all those things, made by people with personalities and stories – yes, it matters hugely.

For consumers with no particular interest in the background to the wine they buy, but seeking a beverage whose flavour they enjoy, can afford and feel comfortable with, it probably does not matter at all – rather it will be a benefit. The further 'Coca Cola-isation' of wine will give this consumer sector greater choice of products.

I must (re)tell my favourite story in relation to the latter point:

I was on a boat sailing down the Yangtze River in China in the early 2000s. A waiter came round offering all of us on deck a free glass of nicely chilled Champagne in a flute glass. We were an assortment of Chinese and international tourists, and everyone seemed happy with their Champagne. Except it wasn’t Champagne. It was Perry – fizzy, carbonated alcohol made from pears. Not a grape in sight, and light years away from that famous region of France. On inspection, it was also packaged in a bottle with a mushroom stopper (albeit plastic) and a foil top.

Did my fellow travellers care or know that it wasn’t the real thing? Not a bit. Did they know what the definition of true Champagne is? I have no idea, but I doubt it. What was clear was that everyone appeared to be enjoying their drink.

This story suggests to me that the upcoming changes are likely to further exacerbate a key point for our trade – there is not one wine market, nor one type of wine drinker, but many. We would be foolish to treat them all the same.

The changes will allow greater opportunity to UK blenders and product developers; to wine producers and brokers with large stocks of unwanted cheap bulk wine; and for everyday consumers looking for an affordable drink at a style they like – and for whom, I suspect, ethereal arguments over how the word wine is defined are unimportant. Let us not forget that rice wine, apple wine, rhubarb wine and many others have been around for a long time too.

The changes will likely make it harder for traditional wine producers of all types to maintain their UK market presence, because the new ‘wine’ products will likely command an ever greater share of limited retail space, especially if they give retailers better margins and consumers buy them in large numbers.

Of course, the UK government doesn’t give a stuff about the fate of the wine sector in other countries. However they should care about our own. To which end they could pay heed to Jamie Goode’s excellent piece in his Wine Anorak blog last May. According to Jamie, the most affordable Canadian wines are now made of imported bulk blended with a small amount of Canadian wine, often sold under the brand of the well-known domestic producer. He reports that such wines now account for half of all the grapes produced in Ontario and 58% of the volume of wines sold there. Talk about diluting a national asset. Wine GB, this one’s for you.

But there is opportunity in adversity. The most powerful way for the traditional wine sector to keep its value in the eyes of consumers is not to rely on regulation, but to do such a good job with the relevance of their product to a significant number of drinkers that they have successful businesses. As good entrepreneurs they will have to rely on themselves and no one else – by making real wines people like the taste of and by actively and creatively marketing them.

Ironically, these new rules give greater scope to real wine producers to ram home the essence of what they are about by pitching their appeal in contrast to the faux brigade. By telling stories of people and place they can make this the very thing that distinguishes them from the soul less AI ChatGPT versions.

The wine market has been evolving into two poles for some time. However we look at it, the effect of these changes combined with those around alcohol duty looks set to turbo charge the process.

It should be acknowledged that the WSTA is not blind to these dangers. As reported in Harpers:

"The WSTA has highlighted its intention to work with the government in the coming weeks and months to agree on labelling rules which ensure consumers are informed about the wine and wine products they buy."

Should this reassure us? Alas not. Relying on small print on labels is pointless. An industry expert with decades of experience in consumer research told me they estimated that less than 10% of people read back labels at the point of purchase; and those that do are mostly at the higher end – thus not those who would be likely to buy the newly created ‘wines’. Even if the information was on the front label, my hunch is that most shoppers would have no understanding of the terms, and if they did were unlikely to care. It is far more likely they will buy based on look, price and taste than product classification.

It very much looks as though the terms of engagement in the UK wine market are about to change dramatically. It might be wise to start strategy planning right now.

Jerry Lockspeiser donates his fee for this piece to The Running Charity which works with homeless young people in the UK.