The UK’s decision to leave the European Union has sent shockwaves through not just the UK’s drinks industry, but globally too. But as the WSTA’s Miles Beale sets out there is no reason why the UK can’t keep its reputation and position as a vital world trading platform in wine and spirits. It can even work with the government to enhance it and make it stronger.
Mile Beale, chief executive of the Wine & Spirit Trade Association, sets out the path forward for the UK drinks industry, and how it is ideally placed to actually help the government put in place trading terms with countries both inside and outside Europe that are to mutual benefit.
The UK is proud to be the beating heart of the global drinks industry and deserves to stay in pole position. Thanks to the steady flow of wine and spirits in and out of the UK over the centuries, our industry is thriving.
Post Brexit there is a danger that leaving the Single Market could lead to blockages and disruptions that lose us our position as global leaders. At the WSTA it’s our job to make sure that doesn’t happen.
The UK remains in the EU and the Single Market until such time as exit negotiations have completed – which is likely to take at least two years. So our advice to members has always been not to panic.
The UK is – still – the world’s second largest importer of wine by volume behind Germany and the second largest, by value, to the USA. Britain imports more wine per head than any other of the world’s top importers.
The UK trades wine on six continents with 124 different countries and generates £17.3 billion in economic activity. Britain’s wine trade has more than doubled in the last decade.
Last year the wine trade brought in £3bn worth of goods to the UK and made £440m for the economy in exports.
In 2015 we saw wine sales in the UK worth £6.7bn in shops and supermarkets and £4.2bn for pubs, bars and restaurants. We are the wine exporters’ global destination of choice and the lifeblood of the world wine trade.
The UK spirits trade is wine’s mirror image, generating as it does some £28.2bn in economic activity.
Last year the UK exported 1.25bn litres of spirits worth £5bn to the UK economy. In 2015 we saw sales of spirits in the UK worth £4bn for shops and supermarkets and £5.8bn for pubs, bars and restaurants.
Beating heart of global industry
Our internationally renowned spirits can boast both the exports success of today and the potential needed for our tomorrow. Arguably, the UK is currently the beating heart of the global drinks industry.
And this strength and balance puts us in a robust position. We should feel confident to weather currency fluctuations and to grow. It is crucial for the industry to have continued access to the Single Market in the future. But as Brexit Secretary, David Davis, has astutely identified countries within the EU will want to protect their food and wine exports. As will many other European countries which benefit from the wide-ranging palate of US Brits.
We are in a strong position to negotiate good trading terms with our partners, colleagues and friends in the EU. And a strong position to trade freely and widely on the international market.
What’s more, our trading partners – past, present and future – will also want to trade with the UK’s wine and spirits businesses. It works in no-one’s favour to do otherwise.
And so tariff free access for consumers both home and abroad is realistic and achievable.
But I would go further in saying there must also be opportunities.
As it always has, the WSTA will work with government to remove barriers to free trade. There is no reason – and surely no desire – for the pulse, that sees wine flow freely into the UK and spirits flow out, to weaken.
There will be challenges and potential blockages to navigate, such as preserving the uninhibited free movement of goods in Europe. And it may take time. But there will also be opportunities raise the volume and tempo of our trade.
As we grow exports of British gin and English wine, for example, we should look to do more trade with third counties beyond the EU – where we must demand to preserve a trading relationship. WE have to be fleet of foot to set up more, to expand further.
Grasping new ways of working
While the consequences of the Referendum are seismic the WSTA is well placed to work with others to shape the future. Our members’ products have a global reach. This along with the skills of the WSTA staff and our members staff make us unique.
Arguably our greatest challenge in the short term will be to ensure that politicians understand and appreciate the challenges to our industry and its world leading status; and act – or allow us to act – to support its present and its future.
But with so many UK industries to support and so many negotiations to complete the government will find itself under immense, perhaps overwhelming, pressure to maintain unfettered access to the International Market and to rewrite the handbook on international trade – a handbook with which it is no longer at all familiar, since the EU took on trade negotiations for the UK and all other EU Member State.
Later this month I am going to New Zealand and Australia to make a start by exploring how our countries can trade in way that is more mutually beneficial than our – or rather the EU’s – current arrangement.
Influencing the government
I believe it’s possible. In fact I believe it is wholly necessary. It is vital that we influence a carefully devised government strategy to ensure that the right trade deals are struck for our complex, global market – but quickly and according to the right priorities.
The WSTA is best placed to help government to achieve what the wine and spirit industry needs. We can prepare the ground for maintaining the flows of trade and stimulating growth.
Within the WSTA we have capacity, skills and expertise that are vital but are missing elsewhere – including inside government. And our members have the industry expertise to help define those priorities.
The WSTA believes that although this is not a time for knee-jerk reactions it is also not a time to be left standing still either. So let’s be brave, let’s be positive and let’s prosper. We remain a member of the EU for now; we are the world’s preferred drinks partner; and in the WSTA we have a team to support a new government whose priority must be to stimulate growth in trade – including ours.
Let’s be at the front of the queue!