The Brexit Effect on Wine & Spirits
Thankfully the Brexit talks finally seem to be getting somewhere as for the wine and spirits trade, no deal will be a bad deal. The representative body of the EU drinks industry has called upon the EU and UK to agree to a ‘gold standard agreement’ and so minimise the Brexit Effect. This will preserve tariff-free trade for wines and spirits to ensure fair competition and consumers’ confidence. A good outcome if agreed, but it is unlikely to be secured by March 2019.
In contrast, a positive forecast comes from the Travel Retail sector. This term emerged when duty-free shopping within the EU was abolished 18 years ago. Suddenly, the well-known British practice of hopping across the Channel to stock up on duty-free goods had gone. And as a consequence, a substantial amount of business was lost. So, when the UK exits the EU on 29 March 2019, this market should be reinstated. The UK will become a ‘third country’. Under current EU law, European travellers can take advantage of duty-free sales if travelling to a third country. However, for UK travellers to also benefit, a change in UK law will be required. The UK Travel Retail Forum are lobbying hard for this and very strong support has been received from the spirits industry. That said, we would still prefer to see a free trade agreement in place.