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Post-Brexit trade deals could pressure Government over duty rises

Published:  28 February, 2019

Major New World exporters to the UK could bring pressure to bear on the UK Government over duty rises on wine as part of negotiations over future free trade agreements.

This was one of the more positive suggestions to arise during a recent Wine and Spirit Trade Association (WSTA) roundtable, looking ahead to the potential effects of various Brexit outcomes on the trade.

“Australia, New Zealand and the US are three of the five top targets for Government [to agree] free trade deals and wine will certainly be high on the agenda for those governments when looking at trade deals,” WSTA chief executive Miles Beale told Harpers.

Beale, who has been in talks with counterparts in the Antipodean markets and elsewhere, confirmed that countries such as Australia and New Zealand - which count wine as an important export - are looking to eliminate tariffs on wine as part of free trade deals with the UK, but are also looking to leverage the full potential of such deals by addressing the issue of high UK duty that potentially holds back more robust sales of their wines.

The industry panel at the WSTA roundtable predicted that post-Brexit – unless the UK goes down Labour’s favoured route of remaining in a customs union with the EU – sales of New World wines would continue to increase at the expense of their EU rivals.

“There is an opportunity to say to Government ‘stop doing that’,” said Beale, with regard to the singling out of wine over sprits and beers for ongoing duty rises.

Trade deals of any nature on wine - free or otherwise - with non-EU countries can only be put in place if there is a no deal or non-customs union Brexit deal, with the WSTA campaigning hard for the latter on behalf of the trade under its No To No Deal banner.

The WSTA also warned that if the UK crashes out of the EU with a no deal, the immediate impact would be chaos at ports for importers for six to 12 weeks or more, with additional paperwork and fees for imports of EU wines costing the UK trade an additional “best estimate” £70 million.

According to a recent report by EY, wine duty currently contributes £7.8 billion to the UK public purse, supporting 189,000 jobs, with some 55% of wine consumed imported from the EU.