WSTA: Brexit clarity and certainty needed sooner rather than later

UK businesses can’t afford to repeat the extensive Brexit planning they were forced to make prior to the original March deadline, the WSTA has warned.

The trade body has published a new definitive guide to getting the best out of Brexit, urging incoming Prime Minister Boris Johnson to do all he could to prevent the UK from leaving the EU without a deal on 31 October, and to publish a clear plan and roadmap for the UK’s exit. It also highlights the severity of the challenges that UK wine and spirits businesses face in the event of a no deal exit in October, which it described as the “worst-case scenario”.

It said it was “imperative’ that all necessary legislation was passed before the UK leaves the EU and essential that the Government works closely with counterparts in EU member states to ensure that systems are consistent and compatible on both sides of the border.

The publication came just before the architect of the Vote Leave campaign, Dominic Cummings, was named as a key advisor to the new PM, with hardline Brexiteer Priti Patel also returning to the front bench, raising the stakes of a no-deal Brexit.

Miles Beale, chief executive of the WSTA said the organisation had spent an enormous amount of time helping its members ensure that the UK wine and spirit trade was prepared for a no deal Brexit in the run-up to the original 19 March deadline, engaging with government to make sure they understood the consequences for businesses upon leaving the EU without a deal, but that a no-deal was still not off the table.

There must be clarity and certainty – sooner rather than later, the WSTA said.

“As a global industry, a no deal Brexit and the uncertainty it would bring still poses a significant risk to our members, and we continue to work tirelessly to ensure their voices are heard,” he said.

According to the new paper, the biggest concern remains the fear that the industry will be prevented from moving goods on and around 31 October 2019. However the revised Brexit deadline also comes when businesses will be increasing their stock ahead of Christmas, and New Year, putting a major strain on resources and warehousing at its busiest time.

Currently, around 85% of WSTA’s members are investing staff time and money to prepare for a no-deal, with the cost of stockpiling rising to around £5million, some businesses reported.

In May, the WSTA told delegates at the London Wine Fair that wine businesses and retailers are being force to waste cash and capital waste cash and capital preparing for the revised October Brexit deadline and rising costs remain a very real concern.

The cost of warehousing rocketed ahead of the original March deadline, and one WSTA member reported that warehousing costs had risen by 60%.

Rising costs were a very real concern, the WSTA said, with one business telling the survey that the combination of two false starts and the uncertainty caused by Brexit had forced it not only to bear the cost of coming up with a plan but also to start operating under its no deal preparations. “Costs including consultancy, travel and management overhead would be around the £100k mark but are still being fully accounted for,” it said.