Brexit – It doesn’t have to be all bad news
So as I write this, in the month the UK leaves the European Union, negotiations are still on-going and it remains unclear what the exact impacts of Brexit might be on the wine industry.
As a major importer, the UK market is one of the most important global wine markets. The UK accounts for nearly 15% of the world’s wine imports. The drop in consumption assumed in the most severe Brexit scenario would have a ripple effect, depressing the value of the global wine trade by 3.5%.
No wonder then wine producers and retailers alike are preparing for the worst and taking measures should a no-deal Brexit come to pass. Producers across Europe are rushing to bottle early and as you would imagine UK retailers are being prudent and stockpiling.
The most noticeable impact of Brexit is the rising prices of bottles imported into the UK. The price of a bottle of wine has already risen by almost 30p since the Referendum in June 2016 and this is only set to continue. This is bad news for British wine lovers.
Both the US and Chile have signed trade continuity deals with the UK to ensure there is no disruption to wine trade after March 29th. These countries have very similar deals with the EU currently so the status quo should stay the same no matter what
The UK is the fourth largest market for US wine exports, and around 9% of UK still wine sales in 2018 were Chilean bottles, so it was imperative that these trade relationships were maintained.
Currently there are no tariffs on wines imported from the EU. The UK is the second largest importer of French wines and spirits, behind the United States, having imported 1.3 billion Euros of alcohol from France in 2018.
A no-deal Brexit for the UK could disrupt EU wine imports through long border delays, import taxes, decreased British demand and increased competition from non-EU markets.
Things will also become difficult as the paperless electronic system used at present will expire if we are not in Europe – without this system in place, businesses would be forced to rely on pen and paper until a new system is in place
Some EU suppliers are already vulnerable to a decline in trade, due to poor weather conditions, so to have barriers put up could pile on the pressure among some European growers.
In addition, every single bottle of wine destined for the UK from the EU ‘could’ be faced with paying to get a laboratory technical analysis of the wine to comply with new regulations. It effectively means all wine from the EU will be faced with the same restrictions that the EU currently places on all wine entering the EU from outside countries.
Another headache for EU producers is the risk the UK will negotiate more favourable trade agreements with other wine-producing nations, such as Australia, South Africa, Chile and Argentina, at the expense of European exporters.
Ultimately EU wine businesses will face costs which UK consumers will be passed on to UK customers to pay.
Good news for English wine?
So is there is a silver lining in all this for UK winemakers?
The industry is small but growing, with more than 500 vineyards and about 130 wineries in England and Wales, many of which specialize in sparkling wine.
UK supermarkets will only be able to absorb the higher costs of imported wine for so long. This will give locally produced wines an advantage, since retailers won’t be forced to hike prices because of the exchange rate or tariffs.
As a result, British wines will seem relatively less expensive, encouraging people to switch over. So little of the wine Brits drink comes from the UK because of small-scale production and a focus on sparkling wine make it a pricier alternative to imported bottles. There is an opportunity here for the UK government to encourage this further by, as many are suggesting, cutting the cost of domestic duty for UK produced wine post-Brexit.
So whatever the outcome – Brexit or no Brexit – I for one will be continuing my journey of discovery around the UK. And not because it may be relatively cheaper but because it is becoming so much better.
Here are my top 3 tips for a post-Brexit toast. Assuming we will still have something to celebrate!
2013 Hattingley Valley ,Blanc de Blancs – Pale golden colour with gentle green hues and delicate bubbles, this Blanc de Blancs displays beautifully the pure linear character of the Chardonnay – white stone fruit, citrus fruit and a delicious honeyed character on the nose; clean and mineral flavours with pastry and brioche notes on the palate. It has a well balanced and refreshing acidity that gives way to a creamy mouthfeel and long, complex finish.
2013 The Mount Vineyard, White pinot – This unoaked white pinot is pale gold in colour and made from 100% Pinot Noir grapes. It has fruity flavours of grapefruit, melon and green apples with an aroma of spicy almonds, mouth-watering citrus acidity and a long finish.
2014 Camel Valley Brut – Young and lively, with a floral, sweet-hay scent, drier palate with a creamy finish. This wine is excellent to drink young, or can be cellared to allow the structure and more mature characteristics to evolve