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LWF: Brexit delay damaging UK's global wine hub reputation

Published:  20 May, 2019

The ongoing uncertainty surrounding Brexit is impacting on the UK's position as an international hub for wine, according to a panel of senior trade figures at the WSTA-backed opening industry briefing at London Wine Fair (LWF).

In a far-reaching assessment of the impact of potential Brexit outcomes, including the still very real possibility of a ‘no deal’ scenario, the panel also explored the ongoing fallout from the postponement of Brexit from 29 March, to 12 April, and then to 31 October 2019.

“We are being damaged by delay, we need resolution - almost any deal - and as soon before October as possible would be beneficial,” said Andrew Hawes, managing director of Mentzendorff, in a frank assessment of the current situation.

Hawes described the UK's “long enjoyed reputation of being a prestige market, a global hub”, but said that decisions are being taken by our wine trading partners that “aren’t helpful” with regard to that positioning, with uncertainty meaning that inward investment in the UK market was already suffering as overseas suppliers put their UK plans on hold.

WSTA chairman Dan Jago added his concern that “in a world where demand exceeds supply, [producers and suppliers] have to make choices”, saying that in the past the ability of the UK to trade freely with the EU had been “a banker, important for us” when it comes to encouraging the world’s wine fraternity to trade with what is a relatively low value market.

The ability of medium and smaller sized businesses to resource a second round of stockpiling and preparation for a possible no deal cliff edge in October was also explored, with the panel suggesting that many would not have those resources, and with banks currently being reticent about extended credit.

“Whatever deal we have, it’s got to be one that allows us time to work out how to trade in the future with our biggest trading partner,” said Jago, adding, “we’ve got to continue to make sure that we have a clear remit, we are professional and we have a clear outlook.”

“This has been a period of more significant turmoil than we have seen in our lifetimes and probably more than we will see again,” said Jago, who called for whatever final deal was agreed to ensure that trade in and out of the UK with the EU – our largest trading partner – was as frictionless as possible.

On the sometimes misunderstood subject of trade tariffs, Miles Beale added his voice to the debate.

The benefits of dropping tariffs on non-EU wine will be swallowed [by the duty rise] in two average budgets. Any benefits from removing tariffs would be gone, so it’s not just about tariffs, it’s about making the UK wine market attractive,” he said of the future.

Despite the panel’s frustration with the lack of progress on Brexit, Jago managed to conclude on an upbeat note, hinting at how that aim of making the UK market more attractive could be achieved.

“The decline in volume [of UK wine sales] is finally being outstripped by an increase in value and that increase in value is finally beginning to outstrip the increase in duty - working to make it more profitable, and we are seeing an enormous amount of innovation,” he said.