Vinexpo debate sets out best and worst-case scenarios for wine industry following the UK’s exit from the EU
The UK and EU might be going through a public, and hopefully not too painful, divorce, but behind the scenes, British and European wine bodies are very much united in trying to ensure there is as little fall out as possible from Brexit.
That was very much the underlying message from last week’s Vinexpo Brexit debate, held on the second day of formal UK and EU negotiations taking part in Brussels.
Although the talks are at the earliest of stages, it was clear from the panel that the hopes of a trouble-free Brexit have been raised.
Both Miles Beale, chief executive of the Wine & Spirits Trade Association in the UK and Jean Marie Barillère, president of the CEEV, representing the interests of EU wine companies and bodies, were united in the view that they would like to see “as little change as possible” to current trading arrangements from any Brexit deal.
“We want to see trade as free and as unrestricted as possible,” stressed Beale. Barillère hoped the Brexit talks would be as much of a “non-event” as possible.
They are certainly doing all they can between their respective bodies to present the case to the UK government and EU that a continued free trade agreement was in everyone’s interests. Both the WSTA and CEEV, and other relevant world trade bodies, were also working on creating a potential “blueprint” for how future trading could work post-Brexit that governments could quickly implement.
Beale said news from the UK government that Chancellor Philip Hammond would welcome a transitional period for future trade deals to be done after the UK leaves the EU means a phased implementation is now more likely. “It is the first time we have heard that and it’s a significant step,” added Beale.
It would effectively mean the UK leaving the EU in March 2019, then having the needed time to agree a EU trade deals, the UK then leaving the Customs Union, followed by the opportunity for the UK to then negotiate bilateral trade deals with non-EU countries.
That would then give the industry anything between two, three, five or more years to carry on as normal and prepare for any subsequent trade deals to be done. “That is the best for the business community to deal with,” he said.
Andrew Shaw, group wine buying director at Conviviality, the biggest wine distributor in the UK, said it was vital a “roadmap” could be established, which businesses could then follow in order to get some “sustainability” back into to their decision making. It was the “uncertainty” that has gripped the wine market since the EU referendum that was so hard for a business like Conviviality to have “clarity” on its future strategy. “We need future trade to be as simple and effective as it is now,” said Shaw.
Sean Allison, owner of Bordeaux’s Château de Seuil, said it was vital both sides took a “pro-active approach” to maintain “security in the economy” and ensure the UK does not start losing foreign investment.
Whilst the big changes and falls in currency rates post the EU referendum have only added to that insecurity, they only account for 1% to 3% of the overall costs and it was still inflationary pressures and duty and VAT that were the “dominant factors” that the wine trade has to face up to, stressed Shaw. Beale confirmed that UK inflation in the past year has seen a 3% increase on wine prices compared to 1% in the previous two years.
Vinexpo chief executive Guillaume Deglise says it’s very much in the interests of the global wine industry that there should be no future “unfavourable trade deals”, and that Vinexpo is very much in support of the UK wine and spirits industry. “The UK is in the top two of countries’ wine exports and the trading power of UK wine buyers is formidable,” he said.