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Wine from the EU could cost Brits an extra 29p per bottle

Published:  19 October, 2016

The cost of an average bottle of wine in the UK could go up by 29p as a result of Brexit, the WSTA has warned.

The cost of an average bottle of wine in the UK could go up by 29p as a result of Brexit, the WSTA has warned.

Recent figures from the Wine and Spirit Trade Association suggest that if passed on, the average bottle of wine coming from the EU would go up 29p and by 22p for wine from outside of the EU.

The trade body for the UK wine and spirits industry reports that the value of sterling is having a "punishing" effect on importers, who are responsible for supplying 99% of the 1.8 billion bottles of wine consumed in the UK.

Managing director of UK wine importers, Hatch Mansfield, Patrick McGrath said that while currency fluctuations are an accepted risk for importers, three months on, there appears to be little prospect of a return to pre-referendum values.

"The importers are having to meet the increased costs, which is already having a significant impact on profitability," he said.

"In the immediate aftermath of the referendum we were covered forward for foreign currency. However this 'cushion' has now run out. This will mean that we will be forced to increase our selling prices."

The WSTA has released a number of forecasts which predict the impact of the 15% drop in sterling's value since June 23.

The cost of importing EU wine could go up by £225m per annum, while the cost of importing wine from outside the EU could go up by £188m per annum.

This could cost the industry £413m - the equivalent to a 10% hike in total alcohol duty.

Some of this may get passed on to the consumer, but will also be absorbed by wine businesses.

Earlier this week, Nick Clegg - the Lib Dems EU spokesman -  published a food and drink Brexit impact report warning that a hard Brexit will put imported beef, cheese and wine prices on a "cliff edge".

The former deputy prime minister and Remain campaigner warned that fears over the price of Marmite were just the beginning of what he believes will be a "triple whammy of punishing tariffs" if the UK leaves the single market.

As the trade heads into the festive season and the new year, the WSTA is asking the government for support by not raising duty at the next budget.

"We should be under no illusions that wine prices are likely to increase, which in the current climate could lead to a bottle of wine going up by 29p," Miles Beale, the WSTA's chief executive, said.

"This is of grave concern to the wine industry and it is vital that government come out in support of the trade which generates £17.3bn in economic activity. We are just weeks away from the autumn statement. Any increase in duty, on top of the post-Brexit Sterling devaluation, would have dire consequences on Britain's wine trade.

"It is not only consumers who will feel the impact of price rises, but also by more than a quarter of million employees in the world leading UK wine industry."

The UK drinks trade as it is now:

According to the WSTA, industry bosses are deeply concerned about the UK losing its role as a key international player. This is how the trade looks now.

1. The UK wine industry directly employs 170,000 people and further 100,000 through its supply chain.

2. The UK is the 2nd largest trader by volume (behind Germany) and by value (behind USA),

3. The UK wine and spirits industry in 2015 contributed £15.6bn to the treasury.

4. Wine is the country's favourite alcoholic drink. 71% of adults drinking wine, which is the equivalent of 39m people.