Is the trade turning a blind eye to Brexit's silver-linings?

By Jo Gilbert

Published: 22 June, 2016

When asked if there could be any merit from a leave result following tomorrow's referendum, the resounding voice from the trade is 'no'.

When asked if there could be any positive outcomes from a leave result following tomorrow's referendum, the resounding voice from the UK trade is 'no'.

But looking at the way the polls are at the moment, the trade might have to prepare itself for an unpopular result.

John McLaren, UK director of the Wine Institute of California, is asking the UK trade to look beyond the uncertainty-is-bad-for-business mantra and see the "bigger picture".

He said: "There is a psychological barrier within EU to play the safe option, which means staying within the EU community. This can be limiting. I'm more excited about the potential of developing relationships outside of Europe in terms of Canada and US."

While many are concerned about the immediate effects of a UK exit, including the damage to the exchange rate and the power of the pound, in his chat to Harpers, McLaren asked the trade to keep an open mind to the possibility of long-term benefits.

"I think the danger is that most people with think about how it will affect next week's mortgage payments rather than what we could be achieving in five years time," he said.

"I think leaving is the more interesting proposition. There's more potential in it for rapid change and advancement rather than the safe option which is next week to be back where we were before."

Tim North at Les Grands Chais de France, traders of wines and alcohols in France with strong UK connections, disagrees.

He says that the devil is in the - in this case, the unseen - detail.

"There are so many unseen barriers to trade that people don't know about. At the moment the legalities on drinks labels are the same for the UK as the rest of Europe. If we leave and the legislation changes, then producers exporting to England would have to come up with two separate labels. I know many small French producers who would be very affected by the additional costs. This goes for the wider world too - including California," he said.

North also challenged the idea that leaving the EU would lead to Britain becoming more entrenched in a global market.

"It's ridiculous to think you can turn the clock back to the way it was before. The world is changing. In terms of technology and communication, the world is becoming smaller. We need to be part of a bigger group if we want to thrive in the modern world."

McClaren went on to point out that from an external point of view, having a national identity separate from Europe would drive innovation in how products are tailored to the UK market.

He said: "A lot of Americans like to think of Europe as a market, so they think the British must be same as the Germans. Only when they delve deeper do they realise there is big different between a French or German and British consumer."

He also argues that the deep rooted relationships between England and Europe's top producing wine countries, will ensure longevity.

"If we leave, people will still buy the cars they want to buy and they will continue drink wine from France and Italy and Spain purely out of convenience, because they're so close, and because we've been doing it for decades. People in the wine business are some of the most traditional in the world. There will be difficulties if we leave but no one can say what they will be until we face them head on."

However, he concedes, "I'm not saying let's just leave and be done with it. Whatever the outcome, members should re-evaluate how we trade with not just Europe but the rest of the world. We should be looking outward."

North concludes: "The damage to the exchange rate is not a small, short-term concern. It's a big worry. I honestly don't see how leaving would benefit us in any way. I hope people really reflect and do the responsible thing tomorrow by voting to stay with the EU."

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