Brexit timing ‘could not be worse’ for drinks industry, warns WSTA chief

Drinks suppliers are feeling the strain of having to prepare for a no-deal Brexit when they should be focused on Christmas sales, the CEO of the Wine and Spirit Trade Association has said.

WSTA chief executive Miles Beale.

Speaking at the WSTA’s industry summit on Thursday, Miles Beale said the proposed October deadline for the UK’s break from the European Union “could not be worse,” for wine businesses, adding that the government “doesn’t understand the value” of the drinks sector.

“We’ve always said there will be significant short-term disruption, and this has been finally acknowledged by Government once it was forced to publish the Yellowhammer report,” he told drinks trade workers in London, adding that it was “not a reassuring read.”

“Timing could not be worse. Warehouse space already under pressure in run-up to Christmas and the Government seems hell bent on failing to act on the concerns of industry. So much for taking back control.”

Suppliers in the drinks industry were already stockpiling wines and spirits to prepare for a no-deal ahead of the initial March deadline, driving up the cost of warehouse space.

Last year, retail groups Majestic and Bibendum PLB admitted to getting in extra stock to act as a buffer to ensure supply, while the WSTA advised members to carry around 20% more stock than usual as “a starting point” in the event of a no-deal Brexit.

Although the trade body has campaigned against a no-deal outcome since the referendum result in 2016, Beale said “we have to continue to prepare and plan for no deal.”

Beale also criticised the government for going back on a promise to suspend paperwork on wine imports for nine-months after the break if no deal is reached with Brussels, arguing that lifting the burden from suppliers and producers could actually be a “net benefit” for the sector.

“We had been led to believe government had heard and understood our concerns, but recent decisions suggest otherwise. We can only conclude from this that Government doesn’t understand the value of the UK wine industry nor the value of imports in general to the UK economy. Imports are worth roughly the same as exports to UK GDP.”

The WSTA has warned that the 600,000 additional import certificates (called VI-1 forms) could cost the drinks industry as much as £70 million.

There is a stunningly simple solution. Don’t introduce burdensome and pointless import certificates; and instead use the time to develop modern import rules that are fit for purpose benefitting producers, importers and consumers. This could be a net benefit for UK importers.”

During his speech, Beale also said he hoped the UK government could join the World Wine Trade Group – an international body made up of wine-producing countries such as Argentina, Chile, Canada the United States. The WWTG helps industry bodies in their respective countries share information, discuss production and sales regulations, and lobby for the removal of trade barriers in international markets. Uruguay officially joined the group in 2018.

International Trade Secretary, Liz Truss, is currently in Australia, and met Australian prime minister Scott Morrison and her counterpart Simon Birmingham in Canberra on Wednesday. Beale suggested it could be an opportunity to raise the question of WWTG membership. “Let’s see.”