Italy soldiering on post-Brexit

By Jo Gilbert

Published: 29 June, 2016

Brexit loomed large over the Definitive Italian tasting in London's Royal Horticultural Halls yester

Brexit loomed large over the Definitive Italian tasting in London's Royal Horticultural Halls yesterday.

Only four days after the announcement that Britain would be severing many of its ties with the world's largest wine producer by volume, there was an atmosphere of soldiering on despite the uncertainty.

Italy is currently gearing up for some political re-evaluation of its own with a constitutional referendum set for October.

This referendum won't decide on Italy's future as part of the world's biggest trading block, but could potentially lead to an Italian EU referendum further down the line.

However, Vito Palumbo, brand ambassador for Tormaresca - part of the Antinori wines family - doesn't think an Italian exit would be something the population would buy into.

"If it comes to an EU refernefum then I think we would remain," he said.

"We're scared to be alone."

As politicians debate over when - or even if - Article 50 will be invoked, there is concern in the industry that the UK will revert to buying cheaper Italian wines if price hikes on duty are introduced.

Palumbo added: "Some people are scared that really cheap Italian wine will make comeback after Brexit. This would be a step back because the quality has really improved in recent years and people are trading up.

"But I'm not too worried, because there is a taste for good quality now. France is still expensive but I think Italy has still a lot of quality to offer the UK at a good price."

Even without Brexit. Italy has struggled somewhat in recent years to make substantial margins in the UK thanks to an increasingly price-competitive market.

It seems that the industry is now waiting to see how companies and the exchange rate respond to sterling's 31-year low on Friday, before the future can be determined.

"If you ask Italians, they will say the UK is already a difficult market to sell into: you always get squeezed on price and its difficult to generate good volumes. Prosecco is selling a lot in the UK but at low margins," Mark Denison, national account manager at Hallgarten Druitt and Novum Wines, said.

"The exchange rate has taken a nose dive, so we will have to see how it and companies bounce back. Some companies were buying ahead before the vote, but that stock will only last so long. I'm quietly hopeful things will find a balance again."

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