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Brexit pushed Californian wine price up by a fifth

Published:  27 June, 2018

The average price of Californian wine imported to the European Union surged by nearly a fifth in the year of the Brexit vote, analysis by Harpers reveals.

The crash in the pound’s value after the vote and growing demand for more premium wines led to an 18.9% rise in the average price of Californian imports to $3.10 a litre in 2016, according to latest figures from California Wines.

That represents a rise in price of 48.6% since 2012, when the average price of a litre of wine imported to the EU stood at just $2.08 a litre. The lion’s share of Californian wine exported to the EU ends up in the UK.

British imports of Californian wine are expected to pass $400m by 2020. The total value of Californian wine exports to the EU in 2016 was $685.2m, up 10.1% year on year chiefly as a result of currency led price increases. Volumes dipped 7.4% to 221.2 million litres.

“Sales of premium, super premium and luxury Californian wines [in the UK] continue to be robust despite very challenging currency-led price increases,” said Wine Institute UK trade director Justin Knock.

“In 2016, the pound was valued at $1.46. A year later it dropped 17% to $1.21. Price increases were largely passed through to consumers as increased shelf prices.”

US wine is the second bestseller in UK supermarkets after Australian, according to IRI. In the year ending 25 February 2017, retail value sales of US wine (most of it Californian) fell 3.1% to £634.1m on volumes that slipped 2.9% to 88.3 million litres.

With the value of the pound now recovering, commentators expect the market for Californian wines to improve in the UK. “We expect this will be positive for California wines in 2018 as importers look to replenish stocks at more favourable prices,” said Knock.