Current Brexit scenario ‘disastrous’ for the UK fine wine sector, says WSTA

Jacopo Mazzeo

Jacopo Mazzeo

01 July 2020

The claim was made during a webinar the Wine and Spirit Trade Association (WSTA) held today to educate fine wine businesses on the dangers of the current Brexit scenario

The webinar was run by WSTA’s CEO Miles Beale, WSTA chair and CEO of Bibendum Michael Saunders, James Miles from Liv-Ex and other WSTA representatives Simon Stannard and Rebekah Kendrick.

Fine wine is worth about £5bn globally, and the UK accounts for one third of that trade. If no deal is struck with the EU by the October deadline however, ‘the fine wine industry could be in trouble’, as Saunders put it. ‘The government could be sleepwalking into a disaster,’ he added.

A no deal Brexit would bring added costs for fine wine merchants, as well as additional bureaucracy, which could make trading simply unviable for a number of businesses.

Bottles, for instance, would need relabeling to include the importer’s UK address. This would translate into an extra 20p per bottle out of the merchant’s pocket, yet could devalue the wine by as much as 20% if the bottle or the label gets damaged. Extra stamps on wooden boxes could devalue the product too, and could cause significant delays if the wines have to be removed before the box can be heat stamped. Further delays would come from the new tariffs and from custom declarations, which might triple the bureaucratic process.

According to the WSTA, the VI-1 (which was subject to much debate during one of our Imbibe Live Online talks) would be particularly devastating for wine businesses. It would cost an estimated £70m to the industry (£330 per form for each lot of wine), it would also require a ‘major admin exercise’, reduce consumer choice on the primary market, and make the secondary market ‘impractical’ or even ‘impossible’.

The WSTA announced that they’re working on an ‘ambitious proposal’ for the government aimed at expanding the UK as a global wine hub by taking inspiration from the ‘Hong Kong model’

Liv-Ex’s James Miles pointed out that ‘these regulations are designed for big wine producing countries, which the UK is not… we import 99% of the wine we drink’.

Amid such a gloomy scenario however, the WSTA announced that they’re working on an ‘ambitious proposal’ for the government aimed at expanding the UK as a global wine hub by taking inspiration from the ‘Hong Kong model’.

The proposal includes introducing zero tariffs, mutual recognition within the World Wine Trade Group (WWTG), and minimal complexity on import and export rules such as getting rid of the aforementioned VI-1 form.

‘These rules have been forced on us by our own officials,’ said Liv-Ex’s Miles, ‘we want to make trading as easy as possible… This is a once-in-a-lifetime opportunity to become one of the most dynamic wine hubs like Hong Kong.’

While working to convince and help the government implement its suggestions, the WSTA is calling businesses to write to local MPs and explain why the proposed changes matter to them.

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