Greg Sherwood MW: UK market opens up for SA wine after French harvest woes

After a moderately sunny, dry and relaxing Easter break across the UK, this week marked the return to normality for most working parents as kids returned to school after a fortnight’s holiday and many grandparents were relieved of child-minding duties and politely dismissed.

For those in the fine wine trade who ventured to Bordeaux for En-primeur last week, a pivotal date in the fine wine calendar, Easter weekend would have been consumed by frantic report writing and tasting note editing after trade buyers and fine wine brokers were forewarned by the negociants and chateaux that the impending 2024 campaign would begin with a bang come Tuesday morning.

Instead, the week began more like a low-powered, diffused dribble into a Bordeaux spittoon, with Chateau Batailley quick out the blocks releasing their special red label 100^th Anniversary 2024 Grand Vin primeur at a mere -7% below their 2023 release price, making the wine only fractionally cheaper than multiple physical vintages of the same producer’s wine on the market, all from superior vintages like 2020, 2021 and 2023. At £150 per 6 bottles excluding taxes, or circa £34 (R835) per bottle delivered, this first release hardly induced a consumer buying stampede.

Though, to be fair to producers like Chateau Batailley, their past pricing has hardly been at the lofty levels of some producers, necessitating calls for a pricing “reset,” thus excusing their more modest price decrease as a polite gesture towards cash strapped consumers that have recently been deserting the marketplace.

The big test will undoubtedly come in the next few days when the likes of Chateau Pontet Canet and the wider Lafite-Rothschild stable of chateaux releases their wines at prices that could very well define the entire direction of the subsequent En-primeur 2024 campaign.

Nevertheless, no matter how merchants and brokers choose to spin it, the 2024 vintage remains a complex and highly heterogeneous mosaic. This is shaping up to be a year where one should “buy the wine, not the vintage.”

As ever, the Bordelais are quick to coin a catchy phrase for each new harvest — “a solar year,” “a winemaker’s vintage,” “a classical vintage,” and so on. For 2024, in a nod to the striking variability even between neighbouring properties, they appear to have settled on: “a micro-climate vintage.” The subtext? Their own wine might not be exceptional, but they’re fairly confident it’s better than their neighbour’s.

For all the rumblings about the quality of Bordeaux 2024 and the quantity of Burgundy 2024, we must still remember that in 2024, Germany, the UK, and the USA maintained their positions as the top wine import markets globally, collectively representing 38% of the world’s total imported wine volume and 37% in terms of value. Considering the probable impending 20% Trump tariffs on EU wines, it seems inconceivable that the USA’s share will do anything other than fall when the next set of statistics are released. The bigger question is what will happen to the UK market imports?

As the second largest volume wine importer behind Germany, the UK seems to have ended its downward sales trend which began in 2020 by reaching 12.6 m/hl (+2.4% on 2023). Bulk wine however, accounting for 37% of the total volume, was the main driver of this meagre recovery, with a 7.2% increase in volume. The import value remained stable at circa €4.6bn. So, at a time when branded volume wine production is suffering specifically from falling overall consumer consumption, this seems a very precarious foundation to base any notions of a recovery on.

More immediate in the minds of South African producers will be the potential pitfalls or opportunities that may present themselves in the face of France’s decimated wine production, which is expected to produce only 36.9 m/hl in 2024, marking a significant drop of 10.9 m/hl (-23%) from 2023, and 16% below its five-year average. With much of this quantity drop coming from the premium regions of Bordeaux and Burgundy, well-priced classical offerings from traditional quality orientated South African regions might find new revitalised demand prospects in the UK.

In South Africa, wine production for 2024 was projected at 8.8 m/hl, marking a more modest 5% decline from 2023 levels and 13% below the five-year average. The harvest faced multiple challenges, including frost, heavy winter rainfall, floods, and high winds. Notably, the extreme flooding in the Western Cape, estimated as a “one-in-200-year event”, alongside elevated disease pressure in certain areas, contributing significantly to the overall lower grape volumes.

Renewed competition in the UK market for South African wine producers is likely to come not from the traditional French classical regions, but rather from outside them. Discounted Italian and Spanish wines are expected to present significant challenges in the value segment, particularly for South Africa’s bulk and volume brands. At the same time, countries like Argentina, Chile, New Zealand, and a resurgent Australia are set to offer stiffer competition in the premium bottled wine category.

While there will always be compelling reasons to buy premium South African wines – including exceptional quality, genuine ageability in both reds and whites, and a rich diversity of styles – the ability to deliver clear value for money will be more critical than ever. Wines that consistently overdeliver at their price points will define success in the UK market in the months, and likely years, to come.

Protecting this core consumer messaging – and the key USPs it’s built on – will ensure that much of the subsequent marketing practically takes care of itself.

• Greg Sherwood was born in Pretoria, South Africa, and as the son of a career diplomat, spent his first 21 years traveling the globe with his parents. With a Business Management and Marketing degree from Webster University, St. Louis, Missouri, USA, Sherwood began his working career as a commodity trader. In 2000, he decided to make more of a long-held interest in wine taking a position at Handford Wines in South Kensington, London, working his way up to the position of Senior Wine Buyer over 22 years. Sherwood currently consults to a number of top fine wine merchants in London while always keeping one eye firmly on the South African wine industry. He qualified as the 303rd Master of Wine in 2007.