The cost of a no-deal Brexit

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The Wine & Spirit Trade Association estimates this will add £330 costs for each of the estimated 500,000 wines arriving in the UK from within the EU. “Introducing VI-1 requirements would be detrimental for all businesses importing wine from the EU, especially those which import wine from smaller producers which would be unlikely to engage in the significant additional cost and bureaucracy with producing a VI-1,” the trade body warns.

“This would have a major impact on the diversity of the wine market in the UK and would especially impact smaller independent wine merchants.”

Martin Treleaven, owner of the freight forwarding company Wineflow, says his business has been planning for Brexit for nearly three years and is “quietly confident that we are well and truly ready”.

But he admits “the complications are deep” and that if a no-deal Brexit happens, delays and rising costs are likely across the industry.

“A normal European truck will cost you £500 to £600 a day,” he says. “If a truck was costing you £2,000 to bring wine out of the south of France to the UK, and the vehicles do have to continuously stop in a port for customs clearance, you’ve gained a 25% increase in costs of transport overnight.

“The trade as a whole will take a hit on that. All that means is the market price is going to go up, whether it’s food or drink.”

He adds: “At the moment there’s no infrastructure anywhere in Europe, in Bordeaux for example, or Beaune, to physically create the correct paperwork for shipping to the UK. Don’t worry about the problems at the ports – because nothing’s going to be there.

“The actual documentation is probably going to be a T-form, which at the moment is used for goods going out of the EU. There are one or two people in an office in Bordeaux doing that. When you suddenly add, I don’t know, 10,000 shipments a month out of Bordeaux to the UK, you’ve still only got two people there doing the documentation.

“Defra have got to decide whether they’re going to use a VI-1 form. That could be stamped by four different agencies in Bordeaux to check the quality of the wine. If they insist on going by WTO rules to the exact letter, you would have to have both of those forms to ship to the UK. And none of these countries are set up to raise them.”

The Imperial Wine Company in Bungay, Suffolk, imports 85% of its wine direct and MD Nickie Mackenzie-Daste is concerned about long waits for shipments if the UK crashes out of the EU without a deal.

“For many goods the regulations will have changed, and the paperwork won’t necessarily be correct, and obviously that will cause delays,” she says.

“Delays at ports is a concern because wine doesn’t like being sat in a lorry getting too warm or too cold. We use reefer trucks which protect the wines, but even so we don’t want any of our shipments to sit at the port for several days or several weeks. I really don’t think the preparations are in place from the country’s point of view for exit and entry of goods.”

Russell Hull, owner of Bexley Wines in Kent, says wine merchants would be “mad not to be worried” by the current uncertainty.

“We’re going to try and import all our Christmas stock before October 31 even though we’ll have to pay more bonded warehousing charges,” he says. “I’d rather know two things: that I’ve got it here, and that we’ve agreed a price prior to any tariffs.

“Our stuff comes through Dover – if they start to hold things at Manston airport obviously there’s going to be a cost to that as well. It’s all happening at the worst time – the only time of the year we actually make any money – and we could have our margins destroyed fairly rapidly.

“I’ve got a bit of a war chest [to bring forward Christmas imports] but it’s not ideal and it’s obviously not what I wanted. I think it’s madness, the whole thing.”

He adds: “We could end up with an emergency budget, duty going on wine, the pound through the floor and tariffs on top of that, just as we move into Christmas.

“Normally by now we’d be doing our preparations for Christmas but I’m holding off because I don’t know what to cost things up at.”

Noel Young of NY Wines near Cambridge doubts the situation will pan out as disastrously as many have predicted.

He argues the onus is on suppliers rather than retailers to prepare for a no-deal Brexit and says his business has “not been stockpiling in the slightest”.

“I don’t personally see there’s suddenly going to be this apocalypse on November 1,” he adds.

“I think it’s going to be a gradual thing and that there’s a lot of scaremongering, personally. But I could be wrong.”

The weakening of sterling is an issue that has already taken its toll on merchants across the UK. “Currency is a pain, but you can’t keep adjusting your prices,” Young says. “You’ve got to suck it up. We were costing everything at €1.12 and we’re now getting €1.09, €1.10, so it’s not horrendous but it’s not ideal.

“At the moment I’m just taking a view that it may well come back a little bit.”

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