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Brexit deal offers boost for wine but concerns linger

Measures that could have cost millions and led to higher wine prices have been avoided, says the UK trade, but there is still extra admin and also uncertainty about how Brexit will play out.

Good news for the UK’s 33 million wine drinkers was buried in the detail of the 11th-hour Brexit deal signed in December, according to the Wine & Spirit Trade Association (WSTA).

‘The deal means that wine produced in either the UK or EU will not require the much feared, costly VI-1 certificate,’ said the WSTA’s chief executive, Miles Beale.

These import certificates and accompanying laboratory tests could have cost the UK industry £70m, the WSTA had argued in a campaign last year. Reduced choice and higher prices would have followed, it warned.

From Prosecco to grand cru Burgundy, around 55% of wine entering the UK comes from the EU.

For fine wine merchants there was the prospect of older wines requiring fresh lab tests to get across the border, said Matthew O’Connell, head of investment at Bordeaux Index.

These hurdles have been removed. ‘Instead there will be a simplified import certificate [from July 2021] with the eminently sensible prospect of the information being made available electronically in future,’ said the WSTA’s Beale this month.

‘The fact that the forms are now simplified is better for everyone,’ O’Connell told Decanter.

Yet the prospect of extra costs related to Brexit has not entirely gone away, even though the no-deal scenario was averted.

Liv-ex said this week, ‘Despite [the VI-1 ] victory, the UK’s departure from the [EU] Customs Union and Single Market has still left wine merchants in both the UK and EU with additional admin, and therefore extra costs.’

The WSTA said EU exporters now face 15 steps when shipping their wine to the UK, versus six prior to 1 January.

Beale said the new systems are still their infancy. ‘It’s too early to predict what the extra costs might be,’ he said.

Are wines getting stuck at the border?

‘The feedback we have been getting from members is that so far it’s fairly quiet,’ said Beale. ‘A lot of companies have chosen to avoid moving goods during this period.’

There is caution, however. The WSTA has been advised that EU member states are now starting to apply ‘the letter of the law’, following a period of flexibility.

This could bring more disruption, and there have been questions about new rules and procedures. ‘There are some emerging questions around online deliveries to Northern Ireland, as the processes are not clear yet,’ said Beale.

Northern Ireland continues to apply EU customs rules at ports, which means there is no change in the documents required when sending wines from the EU to Northern Ireland, according to the UK government.

For some, it’s a case of wait-and-see. A spokesperson for Waitrose supermarket told Decanter, ‘We have been contingency planning for some time and continue to work with our suppliers to look at how to mitigate any potential disruption [from Brexit], but we wouldn’t speculate on any impact to specific products at the moment.’

Beale added that the challenges of adapting to Covid-19 created an extra layer of complexity and uncertainty.

Beyond Brexit, he renewed calls earlier this month for the government to cut duty tax in the Spring Budget, ‘helping cash-strapped consumers and allowing businesses hit hard by the pandemic to recover’.

See also: 

Cognac and more French wines hit with US tariffs

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