Wine prices would increase by an average of 30p a bottle if the full impact of the pound’s collapse since the Brexit referendum was passed on, according to the Wine & Spirit Trade Association.
Chief executive Miles Beale says the currency situation has “fundamentally affected” wine retailers and calculates it would take a 10% cut in excise duty in the March 8 Budget to balance out the effects of the pound’s slide since the summer.
The WSTA is calling on the Chancellor to reduce wine and spirit duty by 2% which he claims is the “very least” the government could do to alleviate pressure on the drinks industry. Beale is urging wine merchants to write to their MPs to argue the case for lower duty, which he says could also deliver higher returns for the Exchequer, based on the experience of 2015 when spirits duty was cut and wine duty frozen.
The WSTA is in talks with counterparts in Europe and around the world to draft trade agreements to give politicians ready-made solutions to the challenges they will face after Brexit.
“The UK government can’t start these negotiations immediately, but we absolutely can,” Beale says. He predicts relations with non-EU wine producers could improve after Brexit.