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Brexit costs rising across trade, new WSTA report reveals

Published:  23 July, 2019

The UK drinks industry is investing heavily to counter the risk of a no-deal Brexit, a new survey of its members by the WSTA has revealed.

Businesses are injecting up to £5m into stockpiling, while warehouse costs have increased by up to 60%, the survey showed.

Some 85 % of WSTA members in the wine-and-spirit trade are investing staff time and company money on preparations for a no-deal Brexit.

The principal concern across the trade is being prevented from moving goods on and around 31 October 2019, the deadline incoming prime minister Boris Johnson has set for the UK to leave the EU.

The WSTA report, titled Planning for a No Deal EU Exit: The wine and spirit industry’s response, calls on the new prime minister to ensure that goods move as freely as possibly between the UK and the EU once Brexit has happened. It also renews calls for wine and spirit duty to be cut to help the industry navigate the turbulent post-Brexit trading landscape.

Miles Beale, chief executive of the WSTA, said: “We spent an enormous amount of time helping our members ensure that the UK wine-and-spirit trade was prepared for a no-deal Brexit in the run-up to the original March 29 deadline. We continually engaged with government to make sure they understood the consequences for businesses upon leaving the EU without a deal.

“Sadly, no deal is still not off the table. As a global industry, a no-deal Brexit and the uncertainty it would bring still poses a significant risk to our members, and we continue to work tirelessly to ensure their voices are heard.

“The businesses the WSTA represents have tackled this challenge head on for three years and will continue to do so, so that the industry – worth £49bn to the UK economy – will continue to thrive in a post-Brexit world.”

Rebekah Kendrick, WSTA’s head of Brexit and EU Affairs and author of the Brexit report, said: “The guide sets out a series of practical proposals to put in place in the event of no deal. By backing British business and giving trade a clear timetable, with commitments to support the sector, the government can ensure the wine-and-spirit trade is able to invest and grow.”

The UK is the world’s largest exporter of spirits, and the second largest importer of wine.

The WSTA’s full list of recommendations for the government are:

• Publish a clear plan and timetable for the UK’s exit of the EU

• Secure a free-trade agreements with key partners

• Continue to work with the WSTA to promote British gin and English wine overseas

• Guarantee continued access to a skilled workforce

• Offer support to SMEs who cannot alleviate post-Brexit pain by stockpiling

• Postpone VAT accounting

• Retain the EU excise movement and control system

• Introduce a 9-month exemption period for VI-1 requirements

• Ensure goods move as freely as possible across the border between the UK and EU – especially between   Northern Ireland and the Republic of Ireland

• Join the World Wine Trade Group

• Commit to wine-and-spirit roundtables

• Take steps to make the UK more attractive, for example by removing all tariffs on imports and cutting excise duty on wines and spirits.