The English sparkling wine industry is buzzing. Production grew by a third last year to 8.3 million bottles. And it is now increasingly rivaling champagne as the flavor of English summer events.
But while champagne is an established investment, English sparkling wine is still evolving. So can it become an investment winner or will it take more time to mature?
Here we look at how you can invest in a bottle of English (or Welsh) bubbly in the hopes of raising a toast to future profits.
Taste test: Vintner Nick Hall says English sparkling wine can now be compared to champagne
Consider investing in vineyards instead of bottles
There are two ways to invest in English sparkling wine; either by buying bottles or by investing in the producers themselves.
While there are over 700 vineyards in England and Wales, only two have shares that are listed and available for ordinary investors to buy. It is expected that more will follow in the coming years.
The largest producer is Chapel Down, accounting for 30 percent of the UK sparkling wine market. It lists its shares on the fledgling online exchange Aquis Exchange. The price is currently 34 pence per share – 12.5 percent more than at this time last year.
But investing in wine is not for the faint hearted. Twelve months earlier it was 55 pence. The dip – as with other producers – would have been the result of people drinking less during the lockdowns.
Wine producer Gusbourne is listed on the London Stock Exchange’s junior AIM market and trades at 77 pence per share. The company, majority-owned by former Conservative Party deputy chairman Lord Ashcroft, is up 20 per cent in value over the past 12 months, but is down 21 per cent in two years.
To invest in any of these companies, you must use a broker, such as Hargreaves Lansdown or AJ Bell. You can invest tax-free if you transfer these shares to an Isa share or a privately invested personal pension.
Since they are highly speculative investments, you only put a small portion of your money into these wine companies. Also keep in mind that some investment platforms charge fees for trading stocks, which can add up quickly.
Both wineries offer investor benefits, with discounts on purchases of up to 25 percent.
Chapel Down’s head winemaker Josh Donaghay-Spire says there are plenty of opportunities for English sparkling wines.
‘Unlike the Champagne region, we are at the beginning of our viticultural journey,’ he says. ‘Hopefully we will be mentioned in the same breath in the coming years – while English wines keep getting better.’ He points out that while 223 million bottles of sparkling wine are drunk in Britain each year, six million are made from grapes grown in English vineyards.
Buy cases of only the best local fizz
Many English wineries win awards for their bubbles, making them a strong potential investment for the future. These include Langham, Gusbourne, Ridgeview, Hambledon, Raimes, Nyetimber, Candover Brook, Sugrue, Davenport and Herbert Hall.
However, investing isn’t as simple as picking up a few bottles from a winery or grocery store and storing them in a cellar in the hopes of selling them for more later. You have to identify the best wines and vintages, which is easier said than done.
Alex Marton, owner of wine merchant Alex Marton Fine Wines, says: ‘The best way to make money from English wines is if you’re lucky enough to spot a great wine and vintage before it’s discovered – so buy early.
“If vineyards get a big reputation in the future, you could be a winner. But also realize that the risk of not making a profit is greater – even if you have the comfort of being able to drown your sorrows in wine.’
Instead of relying on luck, he suggests consulting a wine merchant, like himself, who has spent a lifetime studying the subject. Others include Justerini & Brooks, Berry Bros & Rudd, and Corney & Barrow.
If you buy wine from a merchant, it can be stored in tax inspector-approved warehouses, known as holding in bond. This means that it escapes import duties and VAT. It’s also considered a “waste asset,” so you’re not liable for capital gains tax on profits. These warehouses are also temperature controlled so the wine can last for ten years or more without deteriorating. It typically costs £20 a year to stock a case of 12 bottles.
Alex Westgarth, CEO of wine investment platform WineCap, says quality investment wines start at around £50 a bottle.
Great examples include the 2009 vintage Nyetimber 1086 for £120, 2014 Gusbourne 51 Degrees North for £195 and Chapel Down Kit’s 2014 Coty Coeur de Cuvee for £100.
Could it be a future competitor to champagne?
Although the quality and popularity of English sparkling wine is growing rapidly, it is not nearly as popular an investment as champagne.
Drinking to success: Chapel Down’s Josh Donaghay-Spire says there are plenty of opportunities ahead
Says Westgarth, ‘English sparkling wines are certainly establishing themselves as worthy rivals to great champagne. Recent purchases of English vineyards by the Champagne houses of Pommery and Taittinger show that the French are taking it seriously.
“Yet the jury is still out on its long-term potential, as the Champagne region still holds the upper hand due to its wonderful history.”
Alex Marton says, “For now, if you want to invest in sparkling wine, there’s still no substitute for champagne. That has international appeal for a much larger market.’
Wine data collector Liv-Ex has an index of the 50 most sought-after champagnes — the Champagne 50 — whose value has fallen 5 percent in the past 12 months.
It does not yet include the data for English wine performance, but has started to include English wineries such as Sugrue, Nyetimber and Gusbourne in its index, in the hope that future changes in their values can then be incorporated.
Winemaker Nick Hall has a 12 acre parcel in Kent where he produces 20,000 bottles of sparkling wine a year. Some of them end up at Fortnum & Mason and Selfridges.
The land was formerly worked by his great-grandfather Herbert Hall – whose name was adopted by the vintner and who used to raise chickens and grow hops and fruit.
He says: ‘Over the past ten years we have seen a real change in the way English wines are perceived – and thanks to greater development in winemaking skills and improved marketing they are starting to be taken seriously in the international market.
‘It is now completely justified to compare our best sparkling wines with champagne.’
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