Brexit impact on French wine

France exports €11.7billion of wine, with €143million of that going to the UK, its second largest export market after Germany. What impact will the UK leaving the EU have on the wine industry and on wine consumption in the UK?

1 September 2016
An English vineyard, French wines could cost more, with reduced choice
By Jonathan Hesford

Tariffs

As part of the EU free-trade zone, there is no tariff on wine imported from France. Outside the EU, Britain could impose a tariff on European wines and would be highly likely to do so. The figure being suggested is 32% as that is the wine tariff applied under the World Trade Organisation. The EU would have to negotiate trade deals to reduce that tariff but given that Britain is a net importer of food and drink from the EU, it is unlikely to do that.
 
Duty

Britain has a history of protecting its non-wine alcohol industries by applying favourable rates of duty on beer and spirits compared to wine. It is possible that pressure from the brewers and distillers would further increase duty on wine.
 
Labelling

Currently there is one set of rules for labelling of wine within the EU. Britain may choose to stick to those but the anti-alcohol lobby may well force wine labels to state the government alcohol consumption guidelines, which is voluntary at the moment.
 
Import restrictions

Currently, wine importers in the UK do not require a licence. However this year the government has brought in an alcohol wholesaler registration scheme which could, in the future, require purchase of a licence, thereby restricting the number of importers.
It is also fairly simple at the moment to move wine between EU countries.  Excise duty is payable but is handled by a simple online process which only requires free registration with the EU-wide excise system. This enables individual shops and restaurants to import wine directly from EU producers without having to go via an importer, which they have to do with non-EU wine. Similarly VAT is offset from one EU country to another using an online reporting system.

Today there are thousands of small wine producers in the EU who are able to sell their wines to specialist outlets in the UK. Without these simplified systems in place, it will be much harder for independent wine merchants, specialist distributors and restaurants to import the range of wines they do today.

The importers and national wholesalers will control the market, adding an extra cost and restricting choice. This is the situation in non-EU markets such as the US and even Switzerland.

Direct sales

Consumers buying wine themselves within the EU can transport up to 90 litres duty-free across borders. The UK government loses huge amounts of duty because of the booze-cruise and would be sure to close down that practice immediately. It would also stop the thousands of British tourists taking home cases of wine that they have bought from vineyards and merchants in France.

Bulk wine trade

The UK currently imports large amounts of bulk wine from the EU and overseas which is bottled in Britain and then redistributed to other EU countries. This would not be possible outside the EU.

Conclusion

Leaving the EU will be a big blow to British wine consumers. Not only will they see significantly increased prices for EU wines, they will have their choice reduced to the bigger brands and producers favoured by the big importers and wholesalers. There will be no more booze-cruises for personal consumption, parties or weddings – and vineyards would no longer be able to sell more than a couple of bottles to visitors from the UK.

  • Jonathan Hesford has a Postgraduate Diploma in Viticulture and Oenology from Lincoln University, New Zealand and is the owner, vigneron and winemaker of Domaine Treloar in the Roussillon. www.domainetreloar.com

A year in the vineyard with Jonathan Hesford of Domaine Treloar

Get news, views and information from France
You have 2 free subscriber articles left
Subscribe now to read unlimited articles and exclusive content
Already a subscriber? Log in now