In the event of a no-deal Brexit the WSTA believes that a temporary suspension on all wine tariffs for 6-12 months would reduce the strain on the supply chain that a no deal Brexit will inevitably bring about.
It argues that there would be minimal impact to treasury coffers and probably cost less than having to introduce a system for collection of tariffs on products that currently enter the UK tariff free.
Currently an average priced bottle of still wine costs £5.73. If the UK crashes out of the EU without a deal tariffs on EU wines alongside a planned duty increase on 1 February would add an extra 20p to the price of a bottle.
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 having to stockpile wine.
The WSTA has been advising members for over a year that they should increase their stock by 20% as a starting point in case of a no deal Brexit.
Miles Beale chief executive of the Wine and Spirit Trade Association said: “Since the referendum, the WSTA has campaigned consistently for a deal with the EU that delivers frictionless trade in goods, with no additional tariffs or costs.
"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.
"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.”
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 £100m a year.
The introduction of no deal Brexit tariffs would be a double blow for wine businesses after the chancellor elected to single wine for a duty rise 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, which today costs £5.73, will cost £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, which is taxed at an even higher rate, an average priced bottle currently costing £7.14 will go up 37p to £7.51.
