WSTA in talks with non-EU countries on post-Brexit free-trade agreements

By Jo Gilbert

Published: 13 September, 2016

The Wine and Spirit Trade Association (WSTA) has begun talks with its Australian and New Zealand counterparts about how to ensure the UK remains the beating heart of global drinks industry.

CEO Miles Beale will announce at the WSTA annual conference today (September 13), that work has started on model trade agreements for wines and spirits which could become global blueprints for the industry following a UK exit from the EU.

"It's not just the WSTA who want to see the development of model wine and spirit agreements. I was in Australia and New Zealand last month and there was warm and broad-based support for us to work with their industry bodies and government to develop model agreements," Beale said.

"Trade in wines and spirits is mutually beneficial and all negotiators must and should recognise this. We have no intention of idly waiting around for Brexit to happen we have to take action now. We hope the UK government will welcome our initiative."

Theresa May announced last month that she is preparing the ground for free trade deals with Australia and other non-EU countries.

Proposals for a bilateral free trade agreement is backed by Australian Prime Minister, Malcolm Turnbull, who said he was keen to see free trade arrangements with the UK "as soon as possible".

Australian trade minister Steven Ciobo last week indicated that costs could fall after the UK leaves the EU if a free trade agreement between the two countries is put in place.

While in Australia and New Zealand recently, Beale proposed sector-specific arrangements - either as standalone agreements, or as part of broader trade deals to keep trade uninhibited and tariff free.

The UK is the largest importer and consumer of Australian and New Zealand wines and a is crucial hub to re-export their wines to the EU and further afield.

Of all the Australian wine which ends up in the EU, 69% by volume and 66% by value comes to the UK first.

For all New Zealand wine exported to the EU 76% by volume and 77% value arrives in the UK first.

Additionally, the UK spirits exports to antipodean countries in 2015 were worth £140 million, more than double what it was in 2010.

Any unnecessary barriers to this trade could see all sides taking a substantial hit to their economies.

The latest yearly sales show £1.5 billion worth of Australian wine was sold in the UK, up 3%.

One in five bottles of wine sold in the UK is Australian.

New Zealand is the only origin seeing double-digit percentage growth consistently, with yearly sales of over half a billion pounds in the UK, up 17%.

While trade agreements cannot be set in stone at this stage, Beale said the WSTA is laying the groundwork to ensure that the UK maintains its "pole position" in the global drinks market.

He said: "The UK has a hugely successful wine and spirit industry and is perhaps the key hub for international trade. And while the UK cannot formally negotiate with the New Zealand and Australian governments yet, the industry can prepare most of the ground in advance. That is precisely what the WSTA intends doing.

"Wine from countries like Australia and New Zealand arrives in bulk into the UK where it is bottled, with some being re-exported, creating thousands of jobs for Brits. The wine and spirit industry is a huge contributor to our economy, worth £21.1bn annually and the concern is that leaving the EU could lead to businesses looking to relocate.

"Theresa May and her Australian counterpart, Malcolm Turnbull have both shown their support for pioneering free trade deals between our two countries. Wines and spirits could and should be at the forefront of the deal. It is important that we act on this as soon as possible to help government make it a reality for our industry."

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