The US remains a “really important market for global sparkling wine” despite import tariffs set to be imposed on English wine and champagne, the CEO of Chapel Down has said.
Speaking to The Grocer after the English winemaker reported full-year results for the year ended 31 December 2024, Chapel Down boss James Pennefather dismissed fears that US import tariffs of 20% for champagne and 10% for English sparkling wine could dampen the prospects for the sector.
“The US is a really important market for global sparkling wine, with 27 million bottles of champagne sold [in the market] a year,” Pennefather said. “The tariffs that were introduced don’t impact the excitement that we feel about the opportunity.”
He refused to be drawn, however, on whether lower tariffs set to be imposed on English sparkling wine could hand the segment a competitive advantage over its French counterpart.
“Our stated ambition is to win 1% equivalent share of the global champagne market by 2035,” he said. “But it’s too early to tell what the impact [of tariffs] are going to be on different categories and different markets.”
While international sales were “still a small part” of Chapel Down’s business, accounting for 4.2% of its £16.4m of annual sales in 2024, they “remained an untapped opportunity”, Pennefather said.
Alongside the publication of its full-year results, Chapel Down revealed it had signed a deal with “top 10” US winemaker Jackson Family Wines to distribute its sparkling wines in the market.
Chapel Down hopes the deal – effective from mid Q2 2025 – will help turn around the fortunes of its international business unit, which saw revenues slide by 10% due to reduced export sales “particularly from the US”.
Off-trade pricing to ‘remain competitive’
Closer to home, Chapel Down would continue to adapt pricing to “remain competitive” relative to champagne in the off-trade at “key trading periods” throughout the year, Pennefather said.
Meanwhile, underlying stock levels of sparkling wine in the off-trade had been “maintained” at a new lower base following widespread destocking in the first half of 2024, he revealed.
“We’re confident that the destocking by retailers was a one-off in 2024 and that we’re now operating to a new base,” he added.
Chapel Down swung from a £2.3m profit before tax in 2023 to a £1.4m loss in 2024.
This was driven by an 11% in dip in gross profits, a large non-cash in-year fair-value adjustment on biological produce, as well as exceptional items relating to a strategic review that ended in October, Pennefather said.
“We feel confident in a return to full profitability this year,” he added.
Shares in Chapel Down fell almost 4% in early trading today (3 April).
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