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Could leaving the EU apply the brakes to the gin boom?

Published:  13 May, 2016

Leaders in the gin industry gathered to highlight the dangers Brexit poses to the millions of bottles of gin exported to the EU each year if the UK leaves the single market.

The UK exported 30 million bottles of gin to the EU last year, making up 45% of total gin exports by value.

However, there are concerns that the 174 new spirit distilleries which opened in the UK since 2010 and older distilleries could be hit hard on June 23.

Exchequer Secretary to the Treasury, Damian Hinds, visited Chivas Brothers' Beefeater distillery yesterday (May 12) to discuss the issue.

Spirit industry leaders warned that losing access to the EU single market, which makes overseas trade easier for highly regulated industries such as alcohol, could mean that UK producers won't be able to trade as freely due to the loss of EU common standards.

This is backed up by a recent survey carried out by the Wine and Spirit Trade Association (WSTA), where 90% of its 300 plus members agreed that the UK wine and spirit trade will be stronger if Britain remains in the European Union.

European UnionEuropean Union

Hinds is pushing for a "reformed" EU.

He said: "The UK's gin industry is undergoing a remarkable renaissance with the rest of the world developing a taste for our world-leading gin. The message from industry voices and famous gin makers like Beefeater is clear; leaving the EU would hit exports hard and could apply the brakes to the gin boom. I believe that gin like the rest of our spirits industry will be stronger, safer and better off within a reformed EU."

Miles Beale, chief executive of the WSTA, added: "The great tradition of British gin making is supported by remaining in Europe - for both exporting and quality reasons. Exports of gin have risen by 46% in the past five years, with sales to 139 countries, worth £2.18 billion over that period.

"In 2015 alone the UK exported £231 million worth of gin to non-EU countries and an impressive £189 million to consumers inside the EU's single market.

"Without the benefit of the quality standards underpinned by the European definition of gin our producers and their brands could find themselves with fewer consumers, fewer trading partners and a less glowing global reputation."

According to the WSTA a total of 1.6 billion gin and tonics were sold globally in 2014 and almost 140 million bottles of gin made in the UK are now exported every year.

Government statistics also show that between 2010 and 2015, a total of 174 new spirit distilleries opened in the UK - with 56 new licences issued in the past year alone.

The number of UK gin brands has more than doubled since 2010 from 31 to 73 due to the demand for new brands.

Following the Chancellor's 2% cut to spirits duty last year, duty on spirits was frozen at Budget 2016.

Duty on a bottle of gin remains £7.26. The tax is 81p lower since ending the spirits duty escalator in 2014.