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Wine trade faces £70m ‘paperwork’ bill in no-deal Brexit scenario

Published:  12 September, 2019

A hard Brexit is poised to land the wine trade with a £70m bill following the government pulling the cork on plans to suspend costly paperwork in the case of a no-deal scenario, according to the Wine and Spirit Trade Association (WSTA).

The WSTA said it had recently learned government ministers are planning to renege on an agreement made earlier this year, following crunch talks between the WSTA and officials from Whitehall, that the “sensible solution” was to suspend paperwork on wine imports for nine months should Britain crash out the EU without a deal.

Going back on the agreement will lead to higher wine prices - adding an estimated 10p on a bottle of wine, said the WSTA, additionally estimating that introducing red tape will generate over 600,000 additional forms costing UK wine businesses £70m.

The government’s failure to honour commitments to suspend the VI1 forms is “a real blow” for the UK wine industry, said Miles Beale, CEO, WSTA.

“The additional form filling and laboratory tests required for a no deal scenario will add a massive burden on exporters and importers alike. Wine inspectors will find themselves drowning in paperwork and consignments are going to be held up by unnecessary additional red tape.

“We can only conclude from this that government doesn’t understand the value of the UK wine industry nor the value of imports in general to the UK economy. Imports are worth roughly the same as exports to the UK economy. The burden of import certificates for wine will not simply fall on EU businesses – their pain will be shared by UK importers and ultimately UK consumers.”

There was however a “simple solution”, added Beale. “Suspend the introduction of pointless import certificates and use the time to develop modern import rules that are fit for purpose.”

The u-turn was “yet another example of government failing to listen to industry experts and ultimately failing to back British business”, said Neil Coyle, MP for Bermondsey and Old Southwark and the chair of the All-Party Parliamentary Group (APPG) for Wines and Spirits.

“The worst case assumptions outlined in the Yellowhammer contingency plan are likely to become a reality if we end up with a disastrous no-deal Brexit.”

The paperwork bill, when added to wine duty hikes enforced by the Chancellor in February, as well as the possible introduction of wine tariffs, the devaluation in sterling and rising inflation - will mean UK wine consumers face a budget busting rise in prices if it crashes out of the EU without a deal.

According to the latest figures from a report by EY, wine duty contributes £7.8bn to public purse and the wine industry supports 189,000 UK jobs.