English Wine Industry

Lord Mackinlay of Richborough Excerpts

Wednesday 16th November 2016 Westminster Hall

[Craig Mackinlay (South Thanet) (Con)]

It is a pleasure to serve under your chairmanship this afternoon, Sir Edward. I congratulate my hon. Friend the Member for Tiverton and Honiton (Neil Parish) on securing this debate.

We may be the fifth largest economy in the world, but sadly we are only the sixth biggest wine-drinking country, so there is some making up to be done. Let me cite some figures that I have found on the English Wine Producers website: there are 502 vineyards over 4,500 acres throughout the UK and production is growing—it is now at 5 million bottles a year, but that is really just a drop in the vat, because 1.6 billion bottles per year are consumed in the UK. The average size of our vineyards is just 10 acres—they are very small and very niche, which may prove to be a weakness rather than a strength. However, we are seeing stratospheric growth: in 1975 there were just 600 acres under vine, but we are now at 4,500 acres, and the figure has doubled in the last eight years alone.

As we have heard already, competitions repeatedly rate English sparkling wine as a world-class product. Despite what we have heard about vineyards in the north of the country, much of the production is around Kent and Sussex, which share the soil and chalk characteristics of the Champagne region. We have a long way to go to reach the production levels of France, but let us aim to get there.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

My hon. Friend mentions vineyards in the north. Like my hon. Friend the Member for Colne Valley (Jason McCartney), I represent a northern constituency—probably the most northerly English constituency that is represented in this Chamber today. I am happy to represent Ryedale Vineyards, which produced the fantastic Strickland Estate 2013—an award-winning vintage. I join other hon. Members in asking for a small producers scheme like the one we have seen in the beer industry, because that could turbo-charge the wine industry and accelerate the fantastic growth in wine production in England.

[Craig Mackinlay]

I thank my hon. Friend for his intervention. There are a lot of tax proposals that could be introduced, such as small producers schemes, which would get a lot of small producers off the ground.

I want to mention the experience of Phillip and Sally Watts, who took over Barnsole vineyard, which is situated in the village of Ash, between Sandwich and Canterbury. They are new producers; they have invested heavily and are now producing a significant premium product. They produce just 10,000 bottles of still wine a year, both red and white—the industry has to recognise that still wine is a problem for UK producers generally. It is the sparkling wine market that is growing: production in Phillip and Sally’s small vineyard is now up to 12,500 bottles per year and they hope to get to 20,000 in a year or two.

When I spoke to Phillip this afternoon, he highlighted the problem in competing with bigger producers. At the heart of that problem, as we have heard from many hon. Members, is the duty rate. The duty rate since 20 March this year—not including VAT, which is added to it—is £2.08 per 75 cl for still wine and a staggering £2.67 per 75 cl for sparkling wine. We have to recognise how much duty is lost to the Exchequer because of legal importation by consumers from the EU, as well as the illicit market, which I have been concentrating on lately for tobacco. Too often, after bonding their products and paying lower duty rates in EU countries, larger producers in the UK and the rest of the world are then selling to UK customers. For instance, the duty rate in France is just a few euro cents per bottle, and my understanding is that in Portugal and Spain there is no duty. Small producers cannot take advantage of that cross-border circular trade arrangement, which frankly I think we must recognise as daft. It is certainly to the detriment of our small niche producers.

In summary, English wine has a great future. It has the opportunity to enhance UK agriculture, away from the increasing threat of monoculture, of which we are seeing far too much. It also has the opportunity to create employment and to bring business to rural areas, which often need that support, and we should salute those investing in it. I pay particular tribute to Phillip and Sally of Barnsole vineyard and I wish them well in the future.