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WSTA calls for wine tariffs suspension to avoid ‘no deal’ price hikes

Published:  11 January, 2019

The Wine and Spirit Trade Association (WSTA) has called on the government to temporarily suspend wine tariffs to prevent prices rocketing in the event of a no deal' Brexit .

The industry body said it wanted “clarity from the government” on its post ‘no deal’ tariff plans, warning that any ‘no deal' Brexit would see wine prices hit an all-time high.

In the event of a 'no-deal' Brexit the WSTA believes that a temporary suspension on all wine tariffs for 6-12 months would "massively reduce" the strain on the supply chain.

“If the UK ends up with a no-deal Brexit then wine businesses will have to cope with additional tariffs as well as another duty rise - which is highly likely to end up full square in the consumer’s lap, bumping up wine prices to an all-time high,” said chief executive Miles Beale.

“We are calling on government to clarify their tariff plans now and - in the event of a no deal Brexit - to commit temporarily to imposing no tariffs on wines for at least six months. This would be a pragmatic solution with any loses to the Treasury covered by not having to implement a costly new system. It also leaves intact government’s ability to remove tariffs on wine permanently – but as part of a future free trade deal.”

The WSTA argues there would be minimal impact to Treasury coffers and probably cost much less than having to introduce a system for collection of tariffs on products that currently enter the UK tariff free.

In the absence of any certainty from government and in a bid to try and keep shelves stocked and wine prices down, wine importers across the country are stockpiling wine.

Direct Wines are bringing in an additional 2 million bottles, about a 40% increase, on its usual stock, with And Bibendum PLB said it had developed a “robust Brexit plan” that will see it ordering “significant” extra wine to have ready in stock.

Majestic Wine reported last year that they will hold another 1.5 million more bottles of European wine as part of emergency planning.

Currently there are no tariffs on wines from the EU, Chile and South Africa. A ‘no deal’ Brexit would result in the introduction of tariffs estimated to cost UK wine importing businesses over £100 million a year, according to the WSTA.

Following the decision to let wine duty rise with inflation at the Autumn Budget, from 1 February duty on a bottle of wine will go up 7p.

Add a tariff to the duty rise and VAT this means an average priced bottle of wine will rise from £5.73, to £5.93 in the event of ‘no deal’ - an extra 53p a bottle more than consumers paid before the referendum result when an average priced bottle of wine was £5.40. For sparkling wine an average priced bottle currently costing £7.14 will rise to £7.51.

The WSTA also warned that a ‘no deal’ Brexit would mean the loss of access to the EU’s Excise Movement Control, which tracks alcohol coming in and going out of the country, documenting consignments electronically and allows alcohol to and from the EU to be moved on with no extra checks.

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