The government is being urged to scrap plans to impose costly VI-1 import documentation on all EU wines arriving in the UK from 2021.
The Wine & Spirit Trade Association says European producers will face €300 to €400 of extra costs for every wine they export to the UK.
It argues that the forms have little meaning or relevance and are essentially “a barrier to trade”.
The requirement to use VI-1 forms will hit independents disproportionately hard, especially as specialist merchants typically over-index in European wines.
Speaking at a webinar for independent merchants, organised in partnership with The Wine Merchant, WSTA policy director Simon Stannard described the VI-1 system as “quite burdensome”.
He explained: “An exporter is required to undertake a suite of tests that accompany that shipment. We think those tests will cost around €300 or €400 a go, and we think there would be upwards of about a quarter of a million movements of these documents for goods coming from the EU to the UK.
“So it’s a huge burden on the exporters, but of course that burden simply passes on to the importer and any costs pass on to the consumer.”
He added: “These are not particularly useful forms. I think any wine producer from outside the EU will argue that these are a technical barrier to trade.
“Knowing the three types of acidity in a wine, two types of alcoholic content, the sulphite level, and having a lab test to confirm those details is not particularly helpful. It doesn’t particularly help traceability, but it does cost, and it does add bureaucracy.
“We’re quite worried that with the introduction of these rules, many small producers in mainland Europe will simply no longer want to send their goods to the UK.
“For those independent merchants for whom part of their USP is to get interesting stock from small producers, there’s a genuine risk that the supply might run out because they simply won’t want to spend €400 and go through the necessary hoop-jumping.
“It’s a real issue and one that people should be genuinely concerned about.”
The Wine Merchant’s reader survey this year found that France, Italy and Spain are independents’ most important countries of origin.
The same survey found that just over 18% of wine in the independent trade is imported direct from producers, with 44% of respondents expecting that figure to increase in the coming year.
The WSTA is hoping to recruit more independent members as it ramps up efforts to fight the trade’s corner over issues such as documentation, labelling and tariffs that will come into effect from January.
TARIFFS ON EU wine seem inevitable
The government says it wants a Canada-style trade deal with the EU, but negotiating time is running out, meaning a no-deal scenario – with tariffs imposed on EU wines – is increasingly likely.
According to WSTA policy director Simon Stannard, the draft comprehensive free trade agreement includes some “positive language”, including an aspiration to introduce an electronic Customs system to speed up movement of goods.
But he warned: “What’s really tricky is that the clock is ticking – there hasn’t been very much positive mood music coming out of both negotiating sides. Of course some of that is politics, some of that is posturing, but the simple fact is that UK negotiators have until the end of June to decide whether or not they’re going to ask for an extension to the transition period ending at the end of this year.”
David Richardson said that “the archaic system called CHIEF – Customs Handling of Import & Export Freight – is going to be in use for some time”.
The government has also published its new global tariff for wine imports. “It depends on the volume of the container and the strength of the product that you’re importing,” Richardson explained, “but it’s basically £10 per hectolitre for bulk wine, around £12 per hectolitre for cased wine and £26 per hectolitre for sparkling wine.”
Stannard said the WSTA wants to see “minimal disruption to historical trade flows to goods coming in from the EU and from outside”.
He added: “There’s lots of talk about frictionless trade … but anyone that trades in wine and spirits will be aware there’s no such thing as frictionless trade with the EU, because most goods are moved under excise suspense, so people are used to filling out forms.
“But we want to avoid too much additional friction being added into that process.
“Clearly, we want to see an agreement with the EU that doesn’t introduce any new tariffs. As things stand, failure to secure a deal with the EU will see tariffs put in place on EU wine. Let’s try to remove other tariffs that are bothersome at the moment, particularly the 25% tariff on US whiskey and bourbon that the EU introduced as a result of US tariffs on steel and aluminium.”
WSTA chief executive Miles Beale added: “If there is no deal then the tariffs that are normally applied by the EU on non-EU wines will be applied by the UK on non-UK wines, so that’s basically everything, and it means the same tariffs you currently pay on the US, Australia, New Zealand etc will be visited upon EU wines.
“The only way that will be avoided is if the EU and the UK do a comprehensive free trade deal. We think that is increasingly unlikely.
“We need to dial up the lobbying. Independents are absolutely part of their local communities and as such in a very good place to lobby their local MP.”
The WSTA has produced a template letter (available to download here) which independents are being encouraged to adapt to communicate with their Parliamentary representatives.
“We need MPs to understand what’s at stake here,” said Beale.
Labelling regs will add to burden
“Another piece of impending misery is the labelling changes,” said Simon Stannard, “which is mainly to do with having a ‘responsible business’ put on the back label.
“At the moment, for wines coming from the EU it’s OK to have a responsible business that’s based in one of the EU 28 countries. From January 1, the requirement will be to carry a UK importer address.
“The current withdrawal agreement allows goods that were placed on the market before the end of this year to continue to be sold until exhaustion, but the fact is that after that time, anything that is placed on the market will have to meet the new rules. It’s important to be engaging with your suppliers, making sure they’ve got this in hand if at all possible.”
Importers of organic wine could be in for an admin nightmare next year as the accreditation systems in the UK and EU are aligned.
“The UK will have to register with the EU; EU businesses will have to be registered with and recognised by the UK certification bodies,” said Stannard.
“The Soil Association will need to be registering and recognising EU businesses. It’s all going to take time; it’s all going to potentially disrupt the movement of goods to and from the EU.”