Special relationship: Americans snub champagne in favour of English fizz
Americans are flocking to English wine and snubbing champagne, the boss of England’s biggest winemaker has said.
Kent-based Chapel Down said consumers across the Atlantic are fuelling record demand for English sparkling wine, as the AIM-listed firm bets big on the US market.
Chief executive James Pennefather told CityAM: “Americans are really embracing Chapel Down because it’s a new wine region, which is exciting to them, but also that fresher, crisper style is working well.”
The wine maker flew celebrity restauranteur Fred Siriex to New York to conduct a blind taste test, which found that 67 per cent of Americans prefer Chapel Down wine to traditional French champagne.
“English wine is a category that’s in really strong growth at the moment. Now we are making sparkling wines that stand shoulder to shoulder with the very best from around the world,” Pennefather said.
Cross-channel competition
The wine boss said recent hikes to national insurance contributions and business rates have hit the pubs and bars that supply Chapel Down wine in the UK.
“We’re delighted that Rachel Reeves has recently said that she’s not looking to put more taxation burden onto businesses in the upcoming budget and, for us, that certainty is what we can plan towards,” he said.
Pub landlords across the country revolted against the Treasury at the end of last year, barring Labour MPs after the Budget sent business rates bills soaring for thousands of hospitality firms.
The hospitality industry has warned that the surge in energy prices caused by the effective blockade to the Strait of Hormuz could result in further cost pressures, on top of the tax and cost hikes which came into force in April.
Fuel costs rise
The winemaker said on Wednesday its revenue is yet to be impacted by the Iran war because its proportion of sales in the Middle East is low.
But it warned that a sustained increase to fuel costs could damage profitability, as Pennefather said his vineyards have faced higher petrol bills.
“Where we’re seeing an impact is on fuel costs. The tractor fuel in our vineyards, we have a thousand acres now planted. Also, our logistics costs have gone up.
“That’s still quite a small part of our overall cost base and those are manageable in terms of wider sales,” he said.
Chapel Down returned a £469,000 pre-tax profit in the year to December, up from a £1.4m loss last year, as revenue jumped 19 per cent to £19m.
The profit boost comes after the wine company appointed a new management team, after its first-half results last year prompted a share price slump.