Wine trade says no to exit from Europe

15 June, 2015

Britain leaving the European Union would be bad news for the wine trade, with exchange rate issues likely to erode already tight margins, suppliers have warned.

As David Cameron gears up for a referendum and seeks a better deal from the European Union, OLN asked key wine suppliers how Brexit – shorthand for Britain leaving Europe – might affect their businesses.

“It would be a bloody disaster,” said Andrew Steel, director of Connoisseur Estates.

“Given how much of our trade is with Europe it would be an obvious area of concern,” added Gareth Groves, managing director of Bibendum PLB’s new independent arm Walker & Wodehouse.

“The best thing for the wine industry is being allowed to continue to trade as freely and easily with the rest of Europe as it does now.”

Paul Letheren, owner of Off-Piste Wines, said: “For me the biggest issue is having stability in the market. When you are working on relatively fine margins that are sometimes smaller than exchange rate swings it can cause quite a lot of problems. For me the biggest issue would be how the pound would sit against all these other currencies.”

The impact of Brexit on the euro was the top concern in the trade, with some fearing the currency would collapse and force a return to individual currencies across the eurozone.

Steel said: “I’m not saying that if we came out of Europe the euro would fail, but I don’t think it would survive in its current state. The nightmare for us would be if we had to trade with six countries in Europe and have six negotiations in six different currencies. That becomes impossible.”

Richard Cochrane, managing director of Félix Solís UK, said: “The UK’s biggest trading partner is Europe, and that won’t stop if we are not part of the EU but it will be weakened by it.

“There are huge benefits of being part of that union and I think it would be unhelpful for the wine industry if the UK were not part of the EU.

“Our business’s parent company is in Spain and its subsidiary in the UK sits under the same European laws. It helps to have unity in that and makes the running of those businesses together more straightforward.

“If you end up with more different legislation, from independent retailers through to the largest generics, that will add more complexity in what is already quite a complex picture.”

But others did not expect a huge impact. Craig Durham, managing director of Buckingham Schenk, whose parent company is Swiss, said his supplies would not be affected, and that the UK has always sat a little apart from the rest of the EU.

Stefano Girelli of Italy’s The Wine People said: “I don’t think it would matter much. If you are outside the EU it would probably make it more difficult to import, but I don’t think it would stop people drinking wine. The proof is that there is no higher duty in the world than [the UK’s], and if they are prepared to pay that kind of money it means they love wine.

“There is a big debate about this in Italy too. The last thing we want to do is lose our identity. Beauty is in diversity, and I think we should promote the differences.”

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