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Anson: Wetherspoon vs Champagne

Jane Anson looks at recent comments by Wetherspoon owner Tim Martin as the two-year anniversary of the Brexit referendum approaches, and concludes that his words will do little to soothe wine producers' nerves across the English Channel.

It’s approaching two years to the day since the EU Referendum in the UK, and this Saturday June 23rd will see the biggest march in London since 2016, asking for a ‘people’s vote’ on the terms of whatever deal is agreed between the EU and the UK.

It’s no surprise where I stand on this, as a British person living in Europe (Lord Lawson perhaps being the exception that proves the rule) and luckily writing about wine does its own job of proving the benefits of open borders and cultural exchange. But every now and then one of the Brexiteers claims something so outlandish, and that so directly impacts the wine industry, that it’s impossible not to comment.

You will have read, I am sure, about Wetherspoon owner Tim Martin and his plan to stop serving Champagne at his 800 pubs as of July 9th 2018.  He will instead focus on English sparking wine as well as those from Australia and New Zealand – basically sourced from outside of the EU.

Wetherspoon currently sells around two million bottles of sparkling wine a year, most of it Prosecco (Champagne makes it to only 100,000 bottles a year in the chain and a spokesperson has been a little more circumspect on its sales of the Italian sparkling wine, only saying that they expect ‘within two years’ to look at an alternative).

The company is planning to do the same thing with beer, swapping out its current German range to beers from the UK and non EU-countries.

The news has not just received widespread coverage in the UK press but in France also.

Among the papers that have covered it are the financial newspaper Les Echos (‘the extremely Eurosceptic owner Tim Martin has decided to banish Champagne from his list…’) and national magazine Le Point (‘Wetherspoons pubs to renounce Champagne, Brexit oblige’).

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So far the Champagne bureau in the UK has been upbeat in its response, commenting to the BBC, ‘UK consumers have clearly voted [Champagne] their sparkling wine of choice, making the UK the leading export market’.

But, back in France, the country’s annual wine and spirits report sounded a note of caution, noting that Champagne exports to the UK are down 9% due to devaluation of the sterling post-Brexit.

Martin of course has the right to decide which drinks to stock in his own pubs, and it is hard not to support any country championing their own wine industry (Denbies and Whitedowns are among the beneficiaries). I should also point out that, in a recent Esquire profile of Martin, they made the reasonable point that, ‘Martin is not a typical Brexiteer. For starters, he is pro-immigration. When Wetherspoon’s repeated its beer mat stunt in November last year, distributing 500,000 printed with a ‘Wetherspoon Manifesto’, he called for Britain to ‘unilaterally and immediately’ grant citizenship rights to legal EU immigrants’.

But his suggestion that Wetherspoon’s new selection of non-EU alcohols will be cheaper because trade post-Brexit to non EU countries will ‘reduce prices in shops and pubs’ is more than a little hard to swallow.

‘The EU’s customs union is a protectionist system which is widely misunderstood,’ he commented in the press release accompanying the announcement. ‘It imposes tariffs on the 93 per cent of the world that is not in the EU, keeping prices high for UK consumers. Tariffs are imposed on wine from Australia, New Zealand and the US, and also on coffee, oranges, rice and more than 12,000 other products.’

He has further written in a blog post on the pub’s website that, ‘Wetherspoon has calculated that leaving (the EU) without a deal would result in food prices in our pubs falling by an average of about 3.5 pence per meal and bar prices falling by about 0.5 pence per drink. Similar reductions are likely for supermarket purchases too.  For example, the current EU tariffs on popular Aussie wines would come to an end… Ending tariffs will not result in any reduction in government income, since tariffs collected in the UK are sent to Brussels’.

There were plenty of incredulous reactions to this, one of which came from Gavin Quinney, owner of Château Bauduc in Bordeaux.

He sends the majority of his wines to the UK (to Gordon Ramsay and Rick Stein’s restaurants, among others, so one of the 1.3 million Brits who live and work in the EU) and caused something of a minor Twitter storm with over 1,500 Retweets and Likes by suggesting that the Wetherspoon ploy was ‘a classic bit of Tim Martin propaganda, who at the same time as banging the drum for English wine (nothing wrong with that), had a little jab at EU tariffs.

‘He knew exactly what he was doing – despite lots of people commenting that he was being dim. He mentioned Australia, New Zealand and USA but left out Chile and South Africa who already have Free Trade agreements with the EU.’

I caught up with Gavin this week to ask him to more fully explain the background. ‘What Martin failed to mention was that UK wine duty is £2.16 on still wine, so that’s *27 times* more than the cost of the EU tariff on non-EU wine, while UK duty of sparkling wine is £2.77, and there’s still VAT to pay.

‘The tariff on Australian wine works out at around 6.5-8p per bottle in contrast. Wine consumers in Britain pay 63% of all wine duty levied in the EU across all 28 member states.

‘Incidentally, most New World producers are saying how much the weakness of sterling has increased their prices in the UK, or has led them to be pushed further on the cost price by importers. The 8p EU tariff is almost a side issue, and the EU is anyway negotiating Free Trade Agreements with Australia and New Zealand, which sadly won’t benefit the UK consumer post-Brexit.

‘It was, though, a brilliant and calculated bit of marketing by Martin. The press lapped up the ‘English sparkling beats Champagne’ part, as expected. [There was] less focus on them carrying on with Prosecco, which is a bigger seller at Wetherspoon.

‘As for English sparkling wine at Wetherspoon, it might fit for Denbies to be supplying them but how many producers can compete at that price, and at what volume? What price in a Wetherspoon pub for Nyetimber, Camel Valley or Rathfinny, which retail for around £30-£40?’

What all this does underline is that wine producers in the EU who have a market in the UK, especially those who sell bottled wine that goes to the England via the Channel, need to be wary.

‘To assume it will all be fine is wishful thinking,’ says Quinney, whose own wines take the Channel route regularly.

‘The probability, we hope, is that any trade or customs barriers will be shunted down the road during a period of transition, but we don’t know yet. Can anyone hand on heart say that there won’t be long queues of lorries at the Calais-Dover crossing after 29 March next year? For how long would our wine have to sit in a stationary truck in the sun – and let’s not forget it was 28°C as early as the first May Bank holiday this year.’

He adds, ‘We have no plans at all to reduce the shipments to the UK but we need to be mindful of the pitfalls of having too many eggs in one basket. We also have many England-based customers collect their wine from Calais, especially for weddings, just as many English wine lovers bring back cases from holidays in wine regions.

‘The current EU arrangements mean that private customers can take back as much as they like if it is for private use and not for resale. We don’t know how that will change and it would be a crying shame for that drawbridge to be hoisted up.’

What’s for certain is that as the deadline approaches, temperatures are rising and these hypothetical questions have become impossible to ignore.

Martin’s intervention will not have helped to soothe the nerves of wine producers across the continent.

Read more Jane Anson columns on Decanter.com and Decanter Premium

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