With a history spanning around eight millennia, wine seems to be a commodity that has unending appeal and commercial value, but that does not mean to say that the fortunes of a wine merchant are assured by any means. Indeed, it is even more important than ever in an industry that involves working with such a large portfolio of suppliers and customers to keep a close eye on the books and maintain a steady and solvent cashflow, as SFP has seen.
One business in the wine trade that recently saw its fortunes change is the Revelstoke Wine Company Limited, based in Wimbledon, London. This specialist merchant, which sources wines from small independent producers for onward sale to prestigious hotels and event organisers, as well as other clients, encountered financial difficulties, and SFP’s Daniel and Simon Plant – both licensed members of the Insolvency Practitioners’ Association – were appointed Joint Administrators on 24th August 2012.
Happily the company was able to continue trading, according to Simon Plant, Group Partner at SFP: “The Revelstoke Wine Company had a fairly substantial debt that it could not pay,” he says. “However, following a brief trading spell, we were able to find a satisfactory solution and a sale of the business took place, providing continuity for its customers and safeguarding a number of employee jobs.”
The UK alcohol market has found itself under serious pressure of late with sales having seen a widespread decline, and the wine trade has certainly not escaped completely unscathed. According to an earlier market report from the WSTA, sales of wine in shops were down three percent in volume for the 12 months to end of April 2012. Furthermore, sales of wine had dropped by eight percent in volume in bars and restaurants for the year to March 2012, and sales of champagne had decreased by 13 percent.
However, in spite of these troubles, the wine trade appears to have been bearing up for the most part and, in spite of consumers cutting back on spending – and especially on dining out and drinking in bars – is bucking the general trend. Earlier this year, on the eve of the London International Wine Fair, a poll commissioned by the Wine and Spirits Trade Association (WSTA) – which represents over 340 companies producing, importing, transporting and selling wines and spirits in the UK – found that wine remains the nation’s most popular choice of drink, with 38 percent of the public drinking wine on a weekly basis (compared with 32 percent for beer).
Furthermore, according to a recent report from the WSTA, sales of sparkling wine benefited from the Royal Jubilee celebrations more than any other alcohol category, with sales increasing by five percent in the off trade. Champagne also enjoyed a celebratory summer with on trade sales increasing by 10 percent.
Commenting on this latest market report, WSTA Chief Executive Miles Beale said that the positive mood of the nation over the summer has given wine sales a much-needed boost: “Thanks to the Royal Jubilee and the build-up to the Olympics, it’s perhaps not surprising to see an increase in sales of those products associated with celebration. Even though overall alcohol sales are declining, some categories are showing encouraging signs of recovery which is good news for the trade.”
Meanwhile, in the area of wine production, the news is not so good, what with the variable weather over the summer – including the wettest June ever recorded – having had a negative impact on UK producers. With over 400 vineyards across the UK, about three million bottles of English wine were made in 2011 but that figure is expected to be substantially less this year. Notably, award-winning English vineyard Nyetimber in West Sussex has decided not to harvest its grapes, saying that it was not confident of maintaining its usual standards with this year’s crop.