What a corker! We take a look at Sussex wine’s PDO status

Still and sparkling wines produced in East and West Sussex are the latest UK product to win Protected Designation of Origin (PDO) status.

The announcement, made on Wednesday 15 June 2022 by the Department for Environment, Food and Rural Affairs (DEFRA), affects some of the most prominent labels in the English wine market. Though not without its critics, the move has been heralded by many as a boost for the industry. But what does it actually mean?

What is a PDO?

PDO stands for ‘Protected Designation of Origin’, and is essentially the post-Brexit equivalent of the EU DOC. Products with PDO status have been produced, processed and prepared within a specified region. They must meet quality standards set by DEFRA, and have characteristics specific to their area of origin.

Products that meet these characteristics are free to display the PDO symbol on their packaging, and other producers of the same product will not be able to use the region’s name to describe the product. For example, the Sussex wine PDO prevents wine produced in other areas from calling themselves “Sussex” wines. The PDO distinguishes Sussex wines from wine produced elsewhere due to more than just their area of origin: it also recognises the area’s soil, climate and local winemaking expertise.

There are 32 registered food and drink names with PDO status in the UK, four of them being for wine: England, Wales, Darnibole and now Sussex. Though no other wine areas in the UK currently have an active PDO application, Sussex’s new status might encourage winemakers in other regions to apply.

I own a Sussex vineyard – what does this mean for my business?

Owning a vineyard in Sussex does not automatically grant you the right to use the PDO symbol on the wine you produce. In addition to the grapes being grown in Sussex, the wine must also be processed and produced in the region. The PDO also has further requirements that limit grape variety and place maximum harvest yields on vineyards. There are also restrictions on methods and the ABV of the wine. Further regulations are yet to be confirmed, and a consultation document will also be circulated throughout the Sussex wine industry, which will allow producers to comment before the requirements are confirmed by DEFRA.

So far, the PDO sets the following requirements, among others:

• It limits the grape varieties that can be used to make either still or sparkling Sussex wines to predominantly Chardonnay, Pinot Noir and Pinot Meunier (though Arbanne, Pinot Gris, Pinot Blanc, Petit Meslier and Pinot Noir Précoce may be used).
• The grapes must be hand-harvested, with a maximum harvest yield of 12 tonnes per hectare (14 in exceptional circumstances). Detailed records must be kept and made available for inspection.
• Sussex sparkling wine must be made in the traditional method and from classic sparkling wine grape varieties such as Chardonnay.
• The ABV and chemical makeup of each wine will be subject to an organoleptic test and approved by Wine Standards.
• At least 85% of the grapes used to make Sussex sparkling wine must be of the vintage year.
• Single variety wines must contain a minimum of 90% of the named grape.

If the wine your vineyard produces does not meet the PDO’s requirements – if it is non-alcoholic, for example – you will be unable to call your product “Sussex” wine, even if the product is produced, processed and prepared in the region. If you wish to use the PDO status, you may need to consider the cost implications: changes to your grape supply or processing facilities could be required.

Land in Sussex is already attractive due to the reputation and proven track record of the area’s wine production; many vineyards and farms change hands off market for significant premiums. It will be interesting to see whether PDO will impact land values further.

I'm looking to buy a Sussex vineyard – what does this mean?

Assuming you are buying a vineyard or winery (or both) that is claiming PDO status and you want to continue to do so:

• Checking that the PDO requirements are being met will be important. Having a good consultant or land agent on side early in the process will be helpful, as they can review records and compliance on the ground, in much the same way as a good land agent can assist with BPS payments on a purchase. Management information will be vital, and the contract should provide for reasonable access between exchange and completion and a handover on completion. Depending on the importance for the brand and the seller's involvement, it might also be prudent to consider asking the seller to assist with enquiries or inspections that arise after completion – though this may be difficult to enforce in practice. Having an experienced agent on side to maintain good relations between buyer and seller can be just as important as a well-drafted contract.
• Where there is a meaningful period between exchange and completion, the contract ought to address compliance in the interim. It would be sensible to seek a warranty that the seller has complied with the PDO requirements and will continue to comply until completion.
• Employees or consultants will become even more important: retaining key personnel responsible for compliance will be critical where the buyer is not already an experienced vintner or bringing in their own team. If TUPE applies, as it will for the purchase of most commercial vineyards and wineries, employees will transfer automatically to the buyer; consultants will not. A sensible buyer would ask for contractual provisions designed to ensure the smooth handover of the personnel, business and knowhow.
• The business element may be a larger part of the transaction than you think. While it remains to be seen whether PDO status will guide consumer choice and impact values, acquiring a label with PDO status could entail purchasing goodwill, IP, stock and other assets more commonly seen in corporate M&A than in farm purchases. It is vital that the professional team has specialist corporate support to cover the purchase of the business as well as the land and buildings.

If you are interested in purchasing a Sussex vineyard, or if you have any other questions for the Forsters Vineyards & Wineries team, please get in touch with Henry Cecil.

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