Chapel Down Halts £32 Million Winery Project Amid Market Shifts

Chapel Down, the largest wine producer in England, has decided to halt its plans for a new £32 million winery near Canterbury. The company cited ongoing delays in obtaining planning permission and changes in the market as the main reasons for this decision. Chapel Down, based in Tenterden, Kent, has played a significant role in raising the profile of English wine since its founding in 1977. Its sparkling wines have won international recognition, and the company has seen steady growth in recent years.

Despite a successful 2025 harvest and an 11% increase in sales during the first half of the year, reaching £7.9 million, Chapel Down still reported a pre-tax loss of nearly £700,000. Chief executive James Pennefather expressed confidence in both the company’s future and the broader English wine sector. He described 2025 as a strong year for growing conditions and harvest quality.

The decision to abandon the new winery project comes at a time when growth in English wine is slowing compared to previous years. Industry data shows that sales of English wine rose by 3% in 2024, down from a 10% increase in 2023. This slowdown is reflected across the sector, with some producers now holding more stock than they would prefer due to production outpacing demand.

Chris Spofforth, a wine estate agent at Savills, explained that while demand for English wines continues to rise, it is not matching the pace of increased production. This situation can create cash flow challenges for vineyards unable to sell their wines quickly or at profitable margins. However, Spofforth emphasized that the industry is not facing a crisis and that there are still opportunities for profit and growth.

WineGB, the national association for English and Welsh wine producers, reported that the 2024 harvest was smaller than average, with yields projected between six and seven million bottles—a reduction of up to 40% compared to the ten-year average. However, reserve stocks from previous strong harvests have helped maintain healthy inventory levels. Nicola Bates, CEO of WineGB, highlighted the resilience of producers who managed to deliver a high-quality crop despite lower yields.

The English wine industry has expanded rapidly over the past decade. There are now more than 1,030 vineyards across the UK, with much of the new planting concentrated in southern England. While sparkling wine remains dominant, still wines—especially Chardonnay—are gaining popularity both domestically and abroad. Export sales have doubled from 4% of total sales in 2021 to 8% in 2023. WineGB believes that further government support could help boost exports even more.

External factors may also benefit English wine producers. For example, proposed tariffs on European Union wines entering the United States could create new opportunities for English sparkling wines in that market.

Wine tourism is another area showing strong growth. According to WineGB’s latest report, vineyard visitor numbers have increased by 55% since 2022, reaching 1.5 million visits annually. The organization expects this number to grow by another 20% by 2029. Wine tourism is becoming increasingly important for rural economies and is seen as a key driver for future expansion.

Industry leaders are calling for policy changes such as Cellar Door Duty relief and reforms to tax-free shopping and visa rules to support continued growth in both production and tourism.

The decision by Chapel Down to pause its major investment does not signal a downturn for English wine overall. Instead, it reflects a shift toward more cautious growth after several years of rapid expansion. Producers remain optimistic about future prospects, especially given recent favorable weather conditions and growing recognition for both sparkling and still wines from England.

Looking ahead, industry observers expect a focus on balancing production with demand to avoid overstock issues. There is also an emphasis on expanding exports, developing new styles of wine beyond sparkling varieties, and strengthening sustainability credentials through certification and environmental initiatives.

While challenges remain—such as unpredictable weather and financial pressures—the outlook for English wine remains positive. The sector continues to build on decades of progress with increasing ambition and an expanding presence on the global stage.