FDBusiness.com

The number of new wine producers in the UK has jumped by 48% in a year, from 31 in 2012/13 to 46 last year, as the UK’s wine industry benefits from the renaissance of the boutique food and drinks market, according to research by The UHY Hacker Young Group. The UK chartered accountants group notes that 80% more wine producers applied to register with HMRC last year compared to 2009/10 when there were just 26 applications. The number of wine producers across the UK has reached a 20 year high, with 135 currently open.

The demand for UK produced wine has risen sharply as interest in niche, locally sourced food and drink grows in popularity. Other sectors of the food and drinks industry to enjoy rapid growth over recent years include the craft beer industry, which has seen the number of brewers increase by 188% over the last five years, and the boutique spirits segment, which saw the number of distilleries jump by 186% in a year.

Notable wine producers in the UK include Denbies, the UK’s largest vineyard, producing around 10% of all wine in the UK; international award-winning Camel Valley, and the long-established Three Choirs vineyard.

Roy Maugham, head of tax at The UHY Hacker Young Group, explains: “Consumer interest in boutique products continues to grow. Food products, such as artisan cheeses and organically reared meats, and drinks such as craft beer and artisan spirits have been the focus of increased demand. Now, we’re seeing the same thing in the UK’s once-mocked wine industry. English wines have enjoyed a genuine renaissance over the last couple of years and are now being taken seriously on the international stage.”

He continues: “Consumer demand is increasing as the public is beginning to recognise that these wines have become well-regarded premium products. Many wine producers were hit by poor weather conditions in 2011 and 2012, which crippled harvests. However, the better weather conditions in the past two years have allowed many producers to prosper and will have encouraged other companies to apply to register as producers so they can lay the foundations for future harvests.”

The Government’s removal of a minimum R&D investment requirement has allowed many small businesses such as wine producers to qualify for tax relief. Previously businesses had to spend a minimum of £10,000 on R&D to qualify for tax relief.

“Many wine producers will be doing a considerable amount of R&D activity so the tax credits are giving them an opportunity to expand their businesses in other areas,” Roy Maugham points out. “Many wineries are developing innovative production techniques which are improving the quality of their produce, while also qualifying for tax relief.”