Over the last five decades, James Nicholson has seen it all when it comes to the wine industry here.
Now, it’s facing its own, fresh hurdles – changing tastes, habits, reduced wine drinking across the globe, the outworkings of Brexit, and the increased tax burden.
JN is a successful business, now in the multi-millions. But James says it’s not about continuing to scale and grow into a nine-figure operation.
“[We aren’t aiming to become a] £100m turnover business,” he says. “We work with 300-400 small producers – some have 20-30 acres, most are organic, a lot of biodynamic – looking towards sustainable agriculture.
“The model is different. We aren’t filling 400 containers and sending them to London to be bottled – it’s about provenance and the source, traveling to every part of the word. We see most of our producers on an annual basis.”
JN Wine, based on Crossgar, Co Down, is one of Northern Ireland’s leading wine retailers and wholesalers, and also operates a base in the Republic and Highbury Vintners, located in London.
“Online during Covid was massive – we made an investment of around £300,000 to £400,000 into digital and the internet – we were able to cope, web wise.”
He says while around 10% of that business has fallen back, it’s retained an “enormous amount of business” on that back of that growth.
In the Republic, the business is online only.
“We have our own fleet of vans and drivers,” he says. “In London, most deliveries are done by own team.”
James is currently in the process of completing a deal to buy another business, which will bring the group’s total headcount to around 60.
James is clear that there are changing palates among consumers right across the board.
“The volumes have dropped – wine drinking in Europe and the world is dropping”, he says.
“People are trading up. We are always trying to say – drink one good bottle rather than more rubbish.”
In terms of what people are drinking, James says the old world is still popular, along with New Zealand, Argentina and Chile.
There’s also wine now coming in from places such as Syria and Lebanon, James says.
“Eastern European wine is more popular, but the top wines are more expensive – about £50-60 a bottle,” he says.
The cost of doing business is going up. That includes increasing the tax paid on wine according to alcohol content – whereby a stronger red will pay more duty than a lighter Riesling.
“It will add about a pound to a bottle,” James says.
“It’s a bit of a nonsense… alcohol in the wine smooths things out. When drinking wines with low alcohol, fermentation has stopped, and there’s a lot more sugar in the wine.
“Duty rates are going up. Since there have been increased duty rates, intake has dropped £1.5bn – it will put lights out. You might do the same sales, prices are up, but the number of bottles sold has fallen.
“All wine markets [see] there is trouble out there and a bit of distress – these are family-owned firms we work with.
“It becomes a nonsense. We are going to have the highest duty rates. We do some business in Portugal and there is no duty on wine. I don’t see people falling around the streets – I see people in restaurants.
“Alcohol is an easy hit for [the Government] and there’s a very strong anti-alcohol lobby. They’ve dealt with tobacco, now they are dealing with this. It’s a pity they wouldn’t deal with processed foods.”
The recent Labour Government’s decision will also see an increase duty on wine – poised to rise by 2.7% in line with the RPI measure of inflation.
Like any business which trades across the British Isles and throughout Europe, Brexit has elements “which don’t help particularly”.
“Brexit was supposed to be easy… I’m astonished – the advantages here. If they sat down and said ‘look, we can make this a strong a vibrant place’.
“I thought they would have brought experts and the best brains in – getting some programmes? We could create business zones and be doing so many things. We don’t think 20 years ahead.
“[There is] no strategic plan. Every business needs a strategic plan. It’s hand to mouth. They get money and hand it out.”
James says the current framework offers undiluted access to its markets, but trade coming from GB into Northern Ireland means more “onerous” paperwork.
“A few companies in London were saying ‘we have contracts, would you like to take them over a pallet of wine a month – it’s really difficult to get paperwork through’.
He says the Republic’s new legal labelling – which comes in 2026 – is another element which will add time, effort and investment.