UK winemaker Chapel Down considers elevating money or sale as commerce sparkles

Britain’s largest wine producer, Chapel Down, is contemplating elevating money and even placing itself up on the market to fund extra vineyards and construct a brand new vineyard in a booming trade reworked by rising temperatures and tax breaks.

Chapel Down in Kent is Britain’s best-known producer, based in 2002 and is anticipated to make 3.4m bottles of glowing and nonetheless wines from final 12 months’s harvest. It’s in search of extra funds for its development technique, which incorporates investing in new vineyards, a brand new vineyard to be up and working for the 2026 harvest, and the event of its wine property at Tenterden.

It stated: “As a part of the evaluation, the board will think about all alternate options, together with funding from current shareholders, funding from new shareholders, a sale of the corporate, and different related transactions.”

After posting income of £18m final 12 months, the corporate stated it was on observe for double-digit gross sales development this 12 months. Its shares have risen by 14.5% since their debut on London’s junior Purpose market final 12 months, transferring from the Aquis Trade, and fell 1.2% on Tuesday, giving Chapel Down a market worth of £111m.

Britain’s wine trade continues to be small and concentrated in southern England, however rising temperatures created higher rising situations for grapes, leading to a growth in new vineyards. Vines are being planted as far north as Yorkshire and Scotland, and their UK number has almost tripled from two decades ago to 943. Nonetheless, in conventional wine-growing areas similar to Italy, Spain, France and southern California, excessive warmth is anticipated to decimate harvests.

British wine can be rising in recognition: nearly a 3rd of Britons stated they’d celebrate a wedding with English fizz in a recent Aldi survey, whereas 15% would serve up champagne at a divorce celebration.

Britain is the fastest-growing wine region in the world, in response to the property group Knight Frank. Between 2017 and 2022, England and Wales greater than doubled wine manufacturing from 5.3m to 12.2m bottles, in response to WineGB. It expects wine manufacturing to double once more to 24.7m bottles by 2032.

The UK has additionally caught the attention of Pommery and Taittinger, two of France’s best-known champagne homes, which each purchased land and planted vines in England a couple of decade in the past, whereas the world’s largest glowing wine producer, Germany’s Henkell Freixenet, snapped up the English wine property Bolney in 2022.

Final 12 months was a file harvest and might be remembered as a “close to good 12 months” for vineyards, WineGB stated. There was little spring frost, good flowering climate in June, and after a moist July and August some very heat spells in September and October.

Russ Mould, the funding director on the stockbroker AJ Bell, stated: “Chapel Down has made a reputation for itself through the years however the enterprise seems to have a success the ceiling when it comes to scale. To develop much more, it actually wants an enormous slug of money to spend money on the enterprise and that may be higher coming from a brand new, larger proprietor, somewhat than going cap in hand to shareholders on an advert hoc foundation.

“Loads of large drinks corporations can be out there for a distinct segment participant like Chapel Down because it may add one thing new for them to get their enamel into, and in addition as a method of cross-selling merchandise.”