General information about the United Kingdom (UK)
The United Kingdom, found off the north-western coast of Europe, contains within it the four constituent countries of Wales, Northern Ireland, Scotland, and England; it also encompasses several smaller islands. Its full legal name is The United Kingdom of Great Britain and Northern Ireland, but the United Kingdom, Britain or the UK is more often used as a shorthand. The population in 2021 was 67 million inhabitants.
The UK has a highly developed market economy. As of 2023, the country ranked sixth in the world in terms of nominal gross domestic product (GDP) and ninth in terms of purchasing power parity (PPP). The country has developed all sectors of the economy, and the economy is well integrated in terms of international trade. As of 2022, the UK was the 4th largest importer and also the 4th largest exporter in the world. The capital and largest city is London, with a population, including its metropolitan area, of more than 14 million people. Other major cities include Manchester, Birmingham, Glasgow, Liverpool and Leeds.
Importing wine to the United Kingdom (UK)
Unlike the US, with its three-tier-system, British wine retailers can import wine directly from producers. There are limited restrictions on marketing and communications: any retailer can import wine as both an importer and a retailer.
The UK imported $5 billion worth of wine in 2021, making it the country the world’s second largest wine importer. The main countries from which wine is imported are1:
- France ($1.66B)
- Italy ($879M)
- New Zealand ($462M)
- Spain ($400M)
- Australia ($342M)
A wide-ranging free trade deal has just been announced with New Zealand, a move which will looks certain to increase sales of antipodean wine. Other Commonwealth countries can expect similar post-Brexit deals. Australian wine, already the most popular in the UK, could be next for the boon.
It may also be useful to familiarize yourself with UK legislation governing the import of wine into the country: https://www.gov.uk/guidance/importing-selling-and-labelling-wine
Wine distribution in the United Kingdom (UK)
It all starts promisingly for a prospective investor in the UK drinks market: the average Briton consumes more alcohol than the European per capita average. A total turnover of $32.4 billion in the industry is forecast to reach $39.7 billion by 2025. Of that turnover, a significant proportion is wine. That amounts to £22 billion in sales and almost 400,000 employed across the supply chain. Beer may still be the market’s major player, but wine has an enviable cultural position as the drink of wealth and special occasions.
According to the International Organization of Vine and Wine, the UK is the fifth largest wine-consuming country in the world, with an indicator of about 12.8mhl for 2022. We also saw a significant increase in UK wine imports in terms of value in 2022, increased by 22% and reaching 4.8 billion Euros. Especially noteworthy that during the same period is the growth in imports of sparkling wines amounted to an incredible +41% over 2021.2
In terms of wine distribution, in the UK 80% of wine is sold through supermarket chains. These are mainly large and well-known chains like Tesco, Sainsbury, Morrisons, Waitrose, Aldi and Lidl and many others. It is also important to note that 60% of the grocery market is owned by several companies (Tesco, Sainsbury’s and Asda).
In addition to large retail chains that deal with all categories of goods, there are also well-known and major wine retail chains. The best known is of course Majestic, with almost 200 stores across the UK. According to some reports, their share of the wine market reaches 5%. Other well-known wine chains include Oddbins and Bargain Booze.
Wine consumer preferences UK
Around half of the UK regularly drinks alcohol. There is a demand for any style of wine in the country. Older wine drinkers value brands, reliability and value for money, while newer generations are open to new varieties of wine, for example, organic, biodynamic, sustainable and ethical products.3
The first thing to note is that white is preferred to red. In a major survey of UK drinking habits, dry whites came top, with 41% of respondents preferring bestsellers like Pinot Grigio. A little behind on 38% were full-bodied reds like Shiraz. Anyone who has lived in Britain will be unsurprised at the popularity of Prosecco, which sells more than Champagne. It might be more of a surprise to see that English Champagne has crept up the rankings, tying with Rosé at 16% of respondents.
Wine manufacturing in the United Kingdom
The domestic wine production of the UK is steadily increasing. As of 2023, the country officially had 209 wineries and 943 vineyards, covering an area of 3,928 hectares. Vineyards are mainly located in the south of England: Kent (26%), West Sussex (15%), East Sussex (13%), and Hampshire (10%). The main grape varieties cultivated are Chardonnay (31% of vineyard area), Pinot Noir (29%) and Pinot Meunier (9%).
As of 2022, 68% of wine produced is sparkling wine. Production is growing rather quickly, though its rate of change is hard to predict. In 2017, production reached 5.3 million bottles per year, in 2018 it was already at 13.1 million bottles per year, after which production declined for several years until it resumed growth in 2021-2022. For 2022, production reached 12.2 million bottles per year. Domestic wine is mainly sold within the UK; only 7% is exported.4
Sources:
- https://oec.world/en/profile/bilateral-product/wine/reporter/gbr ↩︎
- https://www.oiv.int/sites/default/files/documents/2023_SWVWS_report_EN.pdf ↩︎
- https://www.meiningers-international.com/wine/power-lists/spotlight-uk-leading-highly-challenging-market ↩︎
- https://winegb.co.uk/wp-content/uploads/2023/08/WineGB-Industry-Report-2022-23-FINAL.pdf ↩︎
