Drinkers want more English wine than the country’s 1,438ha of vineyards can produce. But production remains tiny compared to more established wine countries, prices are high and there are still some people who don’t even realise English wine exists.

While the industry is thriving, enjoying the premium prices and the repeated medal hauls in international wine competitions, some retailers are finding it a struggle to deal with small allocations or to explain the prices to customers.

Poor weather meant a tiny vintage for 2012 – just 1 million bottles compared to a high of 4.1 million in 2010 – which was a challenge for Tesco. Product development manager James Griswood says: “With the limited stock availability we were slightly held back in how we could market English wines to our customers, so maintaining sales has been challenging. However, there is still demand for English wine, and with the 2013 vintage shortly coming though, I expect sales to increase.”

For Erik Laan, who owns a chain of independent wine merchants called Vineking in Surrey and West Sussex, sales haven’t taken off as he hoped. He says: “English wine

is an emerging market and we are not writing anything off. I just think that overall they are a little bit overpriced.”

But many retailers are happy with today’s prices – and say their customers are too.

James Halliday, of Sussex independent South Downs Cellars, says: “We have to remember that even wines at £22.95 are single vineyard, family-owned, vintage sparkling wines. Try and get all that in Champagne and you are looking at spending at least £15 if not £20 more. When you explain that to customers, they get it straight away.”

“Overall I think the prices are spot on,” says James Jewell, retail manager of The Cave in Milford-on- Sea, Hampshire, who is selling plenty of wines priced around £30 a bottle.

But he warns that consumers are getting skewed ideas of sparkling wine prices thanks to the deep- discounting of Champagne.

Frazer Thompson, chief executive at Kent winery Chapel Down, believes prices will drop over the next five years as new vineyards come on-stream and yields improve.

He says Champagne prices will be forced to rise, leaving a gap in the market between cava and Prosecco at the bottom end and Champagne at £20-plus – and points to £15-£25 as the “sweet spot” for English wine.

“We’ve had two hideous years in 2011 and 2012 and then last year a bumper crop. That will be ready about 2016 and that is when we will start to see the need to sell more stock – and we need to ensure the consumer demand is there to met the upsurge in volume,” he says. Julia Trustram Eve, marketing director for English Wine Producers, is not expecting prices to come down – but says the quality to price ratio is right. She says: “Our wines will not go into the lower price points because they are premium, single estate wines.”

While English sparkling wines have become a must-stock, still wines are still establishing themselves.

For Halliday at South Downs Cellars, they don’t always compare favourably with similarly-priced wines from other countries.

“They are slightly overpriced if you compare like-for-like – about £2-£3 more,” he says.

Perhaps in response to the market, there has been a shift in favour of sparkling wine by producers in recent years.

The 2010 harvest marked the first time sparkling wine production exceeded still, and in 2012 sparklers made up 60% of production, compared to 30% for still whites and 10% for reds and rosés.

But Thompson at Chapel Down says still wines are starting to come into their own, with Bacchus wines and his own Chardonnay winning gold medals in international wine competitions, and believes his 50/50 production split is a good business model – partly because still wines can be sold young, aiding cash flow.

He says: “Bacchus is our Sauvignon Blanc and people are buying it because they have been recommended it.

“Once they try it they find it is really well made and delicious – it still has the capacity to surprise and delight. Still wines have a great future.”