Marketing Off-trade

WSTA calls out UK Government on wine import costs

The Wine and Spirit Trade Association has hit out at the UK Government for “misleading the public” over claims that EU wine importation costs would be “nil or negligible”.
If Britain leaves the EU without a deal an estimated 600,000 new import certificates (known as VI-1 forms), all accompanied by a costly lab analysis, will be required to keep wine flowing in from Europe.

If Britain leaves the EU without a deal an estimated 600,000 new import certificates (known as VI-1 forms), all accompanied by a costly lab analysis, will be required to keep wine flowing in from Europe.

If Britain leaves the EU without a deal an estimated 600,000 new import certificates (known as VI-1 forms), all accompanied by a costly lab analysis, will be required to keep wine flowing in from Europe.

Prompted by a recent question from Tim Loughton MP, the UK’s Department for Environment and Rural Affairs was asked to assess the cost of the VI-1 import forms which will be necessary on EU wines which would follow a No Deal Brexit.

In reply to the question Under Secretary of State for Defra Victoria Prentis said,  “As inspections for imported wine are undertaken on a risk-based percentage, regardless of origin or import certification, no specific assessment has been made regarding additional costs of controls, although it is expected to be nil or negligible.”

The WSTA has challenged this reply and it has accused her of misleading Parliament by ignoring the £70 million bill anticipated by British businesses from the extra red tape.

According to the WSTA, the Government’s “astonishing claim” comes months after discussions with the Association had originally led to an agreement to suspend the costly paperwork.

Wine leaving the UK for the EU will also have to complete a VI-1 form – meaning an estimated additional 150,000 forms which will put a strain on wine exports, the UK’s sixth most valuable food and drink export according to the WSTA.

Each form comes at a price – estimated at around £20 per two-page document – which is filled out by hand. And the WSTA reckons that the laboratory tests will cost £300/£400 a time.

Despite the initial recognition of the burden it would place on UK wine businesses, the Government then proceeded to U-turn on this promise at a later date – but the WSTA argues it is inconceivable that they are not aware of the sizeable cost to business.

Last year the WSTA warned that the new inspections for imported EU wine in a No Deal Brexit would generate over 600,000 customs forms, anticipated to treble the inspection board’s workload overnight.

 

ECMS

Under the current system, as a member of the EU, the UK has access to the EU’s Excise Movement Control System which tracks alcohol coming in and going out of the country documenting consignments electronically.

EMCS allows all alcohol categories to and from the EU to be moved on with no extra checks on costs. However, a No Deal Brexit would see the UK losing EMCS which is likely to lead to significant confusion and delay at British ports where new paper documentation will need to be shown and checked.

The new paper-based regime will mean European wine producers will have to pay to fill out a form and cough up for extra laboratory tests for every consignment of wine sent to the UK on top of that, no matter how big or small.

EU wine producers will inevitably pass some – or all – of these costs on to UK importers and customers, believes the WSTA, meaning that UK wine businesses, especially High Street specialist merchants, will suffer.

As well as putting a huge burden on the UK wine industry the WSTA warns that this will lead to higher wine prices – adding an estimated 10p on a bottle of wine – and a reduced choice for consumers.

 

“Import Certs will prove costly”

“The Minister has been highly selective in focussing on the costs falling on UK enforcement bodies of requiring import certificates for EU wine and has chosen to completely overlook the significant costs falling to exporters” said WSTA Chief Executive Miles Beale, “costs which will have to be met by UK importers and ultimately UK consumers if we leave without a deal.

“It is extremely disappointing that despite four years of discussing this issue with Defra the facts have fallen on deaf ears and the Minister has confirmed that the government has not even bothered to make any assessment.

“Far from taking back control, simply rolling over and having to bend to existing EU law which disadvantages wine imports makes absolutely no sense for a nation of wine lovers that imports 99% of the wine we enjoy. This government needs to wake up, listen to business and start taking action that supports economic activity and job creators. And it doesn’t have long to do it!

“We have long supported a risk-based approach to inspection, but the costs of additional VI-1 forms for EU wines will not be ‘nil or negligible’ – the truth is that for UK wine SME businesses they will be catastrophic and are likely to put people out of business. But it’s not just British business which will suffer, Britain’s 33 million wine lovers will too. The cost of wine will go up and consumers will see some of their favourite wines disappear from the shelves.”

But the extra form-filling won’t just leave the wine industry with a headache, UK wine inspectors will find themselves drowning in processing paperwork.

Every hand-written VI-1 form will have to be scrutinised and stamped before wine from Europe is allowed into the UK.

It’s estimated that it would take 12 full-time wine inspectors a whole year to process the half a million new VI-1 forms expected to mount up following a No Deal Brexit. This does not take into account the other work carried out by Wine Standards who currently consist of a team of six regional inspectors.

55% of wine consumed in the UK is imported from the EU.

Last month the WSTA once again wrote to the Chancellor of the Duchy of Lancaster Michael Gove MP, re-iterating its calls to suspend the damaging additional documentation and tariffs on wine and offered, post lockdown, to facilitate a visit to a wine business to see at first hand the potential impact that VI-1 implementation would have. According to the WSTA, he has yet to reply.

"It’s not just British business which will suffer, Britain’s 33 million wine lovers will too. The cost of wine will go up and consumers will see some of their favourite wines disappear from the shelves.” - Miles Beale.

“It’s not just British business which will suffer, Britain’s 33 million wine lovers will too. The cost of wine will go up and consumers will see some of their favourite wines disappear from the shelves.” – Miles Beale.

 

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