Government reveals temporary customs plans post-Brexit

Businesses supplying wine to the UK may see temporary customs arrangement put in place after Brexit to ensure that trade continues smoothly, the government has confirmed.

It is one of a series of measures set out by the UK government as part of an “ambitious” customs arrangement that will form the backbone of its negotiations in exiting the EU. The publication of the customs union document, due today, is the first in a series of paper being published by the UK, underlining the importance of UK trade with the EU.

No formal timetable appears to have been set regarding for how long the ‘temporary’ customs union arrangements would be in place, but Brexit Secretary David Davis today indicated in a series of TV and radio interviews that this would be of “shortish” duration, The Guardian reported, although Sky News reported Davis as saying this could be roughly two years, or until 2022 at the latest.

The WSTA, who are maintained the importance of avoiding a “cliff edge” and keeping Britain’s wine and spirit trade flowing, welcomed the move, saying it represented “a start in describing what the Government wants post-Brexit” and the crucial interim arrangements. However CEO Miles Beale said it was important to recognise that no specific time limit for an interim deal has been spelled out and that this is only a UK Government proposal “for now”.

“As the paper points out, it will need to be agreed with EU partners. Even with a welcome temporary deal in place, the clock will still be ticking,” he said.

“This again demonstrates why it is vital that the WSTA continues to work closely with trade bodies and government across Europe to ensure the wine and spirit industry is as prepared as possible and working together for a Brexit with minimal disruption to our industry’s trade.”

Keeping trade flowing

Speaking exclusively to db in a recent interview, Beale said an interim arrangement for Brexit would be the best option, stressing the importance of maintaining frictionless borders to keep goods moving in and out of the UK.

He said that while that the wine and spirit industry was the only part of the food and drinks sector that ultimately wanted to be out of the customs union due to the benefit of signing international trade deals with other nations, a clear timetable of when it would get there was necessary to help businesses plan and ensure there was no problems of supply.

“If there is a so-called ‘hard’ Brexit (and I don’t like that term), you have no choice but to have customs border ranged at our border and introduce [controls and tariffs] where there are none now, so at the very least you’d have to checking in of goods as they go in and out. At least in theory,” he told db. “It is in no-one’s interest to erect tariffs where there are none at the moment.”

However he argued that the free flow of supply was more of a concern than tariffs themselves, which on wine tended to be quite low (except from wines from Chile and Australia).

Complex movement 

He said the HMRC had initially failed to appreciate the complexity of the current single system for moving goods in and out of the UK, which not only affects the wine and spirit industry, but that they had come to see the benefits of the current system.

“I don’t think HMRC as an institution appreciated the complexity of that and it’s not just us, it’s people who import flowers or fresh produce, they have a different and in some says more urgent problem,” he pointed out. “But I think that HMRC and government now appreciate the issues with continuing to have the movement of goods and our members are better prepared for it,” he said.

“They understand very well is that we have a discreet system for moving goods across the single market, the Excise Movement and Control System (EMCS), and that we’d like to continue to use that. But we recognise we can’t guarantee it.”

“Our argument is that it should be, that other members states would prefer us to have access to it, and this is where we’re in a good position to argue it. We import more wine than anywhere else in the world, and export more spirits than anywhere else, so whether on receiving or sending end in Europe, you would rather keen going with the same system, why would you want to change it? “

He argued that if there was no option to retain the EMCS, it would take time to adapt a new system.

“We’ve been very clear to HMRC about how long we’d need to put that in place,” he said. “The silver lining to that cloud is that if you had the time to do it, you could have a new system that works as well for the EU as well as non-EU producers, so potentially, one single system.”

For an in-depth analysis on the implications of Brexit for the drinks industry, please read our full interview with Miles Beale here.