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| 25 July, 2019
‘Planning for a No Deal EU Exit: The wine and spirit industry’s response’ calls on the new Prime Minister to ensure that, post-Brexit, goods move as freely as possibly between the UK and the EU and that wine and spirit duty is cut to help the industry navigate the turbulent post-Brexit trading landscape.
The WSTA is also urging the next PM to publish a clear plan and roadmap for the UK’s exit, having listened to their membership and come away clear in the knowledge that UK business neither wants nor can afford a repeat of extensive Brexit planning prior to the original, and missed, 29th of March deadline.
Polling of WSTA membership – including firsthand accounts of the real issues facing industry – has allowed the WSTA to set out a list of recommendations to help clear the fog of Brexit uncertainties.
The UK is the world’s largest exporter of spirits, and the second largest importer of wine, but to maintain our country’s defining role the UK government needs to deliver some practical solutions to keeping trade flowing.
Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said:
“We spent an enormous amount of time helping our members ensure that the UK wine and spirit trade was prepared for a no deal Brexit in the runup to the original March 29 deadline. We continually engaged with Government to make sure they understood the consequences for businesses upon leaving the EU without a deal.
“Sadly, no deal is still not off the table. As a global industry, a no deal Brexit and the uncertainty it would bring still poses a significant risk to our members, and we continue to work tirelessly to ensure their voices are heard.
“The businesses the WSTA represents have tackled this challenge head on for three years and will continue to do so, so that the industry – worth £49 billion to the UK economy – will continue to thrive in a post-Brexit world.”
The WSTA’s no deal booklet sets out what the Government should do:
• Publish a clear plan and timetable for the UK’s exit of the EU
• Secure Free Trade Agreements with key partners
• Continue to work with the WSTA to promote British gin and English wine overseas
• Guarantee continued access to a skilled workforce
• Offer support to SMEs who cannot alleviate post-Brexit pain by stockpiling
• Postpone VAT accounting
• Retain the EU EMCS
• Introduce a 9 month exemption period for VI-1 requirements
• Ensure goods move as freely as possible across the border between the UK and EU – especially between Northern Ireland and the Republic of Ireland
• Join the World Wine Trade Group
• Commit to wine and spirit roundtables
• Take steps to make the UK more attractive eg removing all tariffs on imports and cutting excise duty on wines and spirits.
Rebekah Kendrick, WSTA’s Head of Brexit and EU Affairs and author of the Brexit report, said:
“The guide sets out a series of practical proposals to put in place in the event of no deal. By backing British business and giving trade a clear timetable, with commitments to support the sector, the Government can ensure the wine and spirit trade is able to invest and grow.”
While the industry’s firm preference is for a negotiated EU Exit, the WSTA continues to prepare its members for a No Deal Exit scenario.
The publication makes clear that the biggest industry concern is being prevented from moving goods on and around 31 October 2019.
Businesses will be increasing stock levels for Christmas and New Year, meaning warehousing space will be even more limited than it was in March 2019 putting a major strain on business resources at its busiest time of year.
The WSTA members survey revealed that 85 % WSTA wine and spirit members are investing staff time and company money on preparations on a no deal Brexit.
Members reported a range of the size of cash injections put into stockpiling with quotes of up to £5 million. One WSTA member reporting that the cost of their warehouse space had increased by 60%.
Rising costs were a very real concern, made clear in the survey replies, one member said:
“Unfortunately, with the two false starts and uncertainty we were forced as a business not only to bear the cost to come up with a plan but also to start to operate under our no deal preparations. Costs including consultancy, travel and management overhead would be around the £100k mark but are still being fully accounted for.”