What lies ahead for the UK drinks industry?

Richard Cochrane, managing director Felix Solis UK

“The UK’s current and historical central role on the global wine stage is at risk, subject to the outcome of the Brexit negotiations. Equally Spain, as the largest wine exporting country, faces a serious Brexit challenge.

“However the UK remains the largest market for Spain’s key bottled wine exports, including Rioja, with a 12% share of Spain’s total exports, which is worth EUROS 335 million to Spain.

“Importantly, the UK also provides a key shop window for the global reputation of Spain’s best wines. Brexit places all of this at risk, which is why a tariff free environment is pivotal to the future success of trade in both countries.

“The ”triple whammy’ of adverse exchange rates, rising duty and global tightening in supply has already started to reach the consumer with rising wine inflation and declining sales across the wine category. Assuming the general election does not result in a change in Westminster, it is likely that the recent worsening duty regime will continue for the next five years. This will be hugely damaging to industry and requires a fresh appraisal of the current excise model to better mate the current conflicting needs. Smarter excise models already exist for beer, and wine would do well to learn from these.”

“Failure to secure a good Brexit for both the UK and Europe will take a generation to remedy and risks much for the UK and Spanish industries.”

 

For a run-down of what is in store at this year’s London Wine Fair, check out our guide in the May issue of the magazine, or click here.

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