Off-trade

Red tape to cause chaos & price hikes for UK wine

A new report from a committee of UK MPs shines light on the impact on the UK’s wine business of the government’s new red tape requirements. These will push up the price of wine for consumers and cause “chaos” for the wine industry.  

 

Fine wine merchants have told MPs it will be impossible for them to meet the testing requirements (which would mean opening and thereby ruining expensive bottles of wine) and remain competitive, which will inevitably result in businesses having to relocate from the UK to avoid using the forms.  

Fine wine merchants have told MPs it will be impossible for them to meet the testing requirements (which would mean opening and thereby ruining expensive bottles of wine) and remain competitive, which will inevitably result in businesses having to relocate from the UK to avoid using the forms.

Following an inquiry into the impact of introducing a number of controversial new wine import requirements (including the introduction of the infamous VI-1 forms which would “be chaos” for all those companies buying and selling European wines which are unfamiliar with VI-1s and lab tests) the All Party Parliamentary Group for Wine and Spirits has published a report on the subject.

Wine companies there have spelled out the cost to consumers and businesses of a series of new inspections and paperwork requirements  voluntarily proposed by the UK government for wine imported from the EU from the 1st of  January next year.

If the government refuses to scrap plans such as those to introduce wine import certificates (so-called VI-1s) and lab tests, experts warn that businesses could fold or be forced to relocate outside the UK. Job losses are inevitable and the Treasury will lose tax revenue.

Worried UK wine firms gave or submitted pages of evidence to the inquiry citing a catalogue of concerns.

The report was published in the same week as an amendment fromLord Holmes of Richmond to the to the Agriculture Bill calling for a Government review into the requirement for VI-1 forms and calling for a “revolutionary electronic alternative” for any necessary information.

“For those suppliers who were trying to be proactive and work out what to do, they’re getting little to no information from their own Customs officers,” said a spokesman for one of the wine companies, Direct Wines, as part of the inquiry.

“This is going to be unbelievably difficult to implement” added Liv-Ex, a leading global trader in fine wines, in giving evidence to the effect that  Liv-Ex alone will have to produce at least 15,000 forms and “600,000 or more forms are going to be produced” Liv-Ex predicted.

Fine wine merchants have told MPs it will be impossible for them to meet the testing requirements (which would mean opening and thereby ruining expensive bottles of wine) and remain competitive, which will inevitably result in businesses having to relocate from the UK to avoid using the forms.

As well as the huge cost to wine businesses – estimated at over £70 million a year – there will be a big reduction in range and choice.

One independent wine merchant said, “UK customers have become accustomed to being able to buy the food and drink they like from all over the world. If they’re suddenly unable to buy major brands from Bordeaux, Champagne, Rioja, Prosecco, I think they’re going to be very unhappy”.

Other wine businesses stressed that this was an opportunity for the government to move forward rather than take a step back.

Chainvine, experts in digital systems, said, “The Government should declare a ‘War on Paper’. It is wasteful, unsustainable and in the long term not resilient as Covid-19 has shown us”.

The report concluded that the introduction of import certificates for EU wine, something that isn’t required of any other category of alcoholic drink, will add further time and costs which will ultimately fall to the consumer, with no demonstrable benefit.

MPs were told it would push up the price of the nation’s favourite alcoholic drink and reduce the range of wines offered to the UK’s 33 million wine drinkers.

Last year the Wine & Spirits Trade Association warned that the new inspections for imported EU wine would treble the workload of UK wine inspectors overnight.

On top of this the report pointed out that VI-1 forms will damage the UK bottling industry and could hinder the growth of the English Sparkling wine industry.

“Sadly Defra [Department of Environment, Food & Rural Affairs] Ministers are stubbornly ploughing ahead with the introduction of costly VI-1 certification for EU wines” said WSTA Chief Executive Miles Beale, “meaning that at the end of the year wine drinkers will be facing price hikes and inevitably find that some of their favourite European wines will vanish from the shelves.

“It’s madness! More than half our wine comes from Europe. Instead of choosing to suspend and reduce red tape and costs for wine, Ministers have elected to apply additional burden and some £100m in costs for UK businesses and consumers. And with no idea where the lab testing capacity will come from.

“Deal or no deal – it’s within Government’s gift to reverse this decision. It’s baffling why the politicians seem hell bent on pushing up prices for British consumers and punishing British business.”

The APPG’s Co-Chair Neil Coyle MP said, “Wine import certificates were designed by the European Union to make importing wine from outside the EU more difficult. The UK is the second-largest importer of wine, by volume and by value, in the world.

“About 99% of wine consumed in the UK is imported and it makes no sense for the UK Government to retain or extend these costs. This would contradict the Government’s claim of opening up the country to world trade and would hit consumers and our economy”.

APPG Co-Chair Helen Grant MP added, “I hope officials will consider our recommendations and remove barriers to trade, incorporate new technology and reduce bureaucracy.”

Sign up for Drinks Industry Ireland

Get a free weekly update on Drinks Industry trade news, direct to your inbox. Sign up now, it's Free