Brexit bad for business, says UK drinks trade

08 April, 2016

Fears over a Brexit have sent exchange rates plummeting and caused consternation in a UK trade that is now paying considerably more for wines from Europe and South America.

The rate has fallen from €1.40 to the pound to around €1.25, hitting imports from Old World countries, while the pound has also suffered losses against the dollar, which is used for purchasing wines from Argentina and Chile.

It is also hitting anyone selling beers and spirits from around the world, or exporting British products.

Importer Andrew Steel, who runs Connoisseur Wines, said: “Exchange rates are the biggest thing on the horizon. Brexit is the elephant in the room. Since the referendum was called exchange rates have gone down by more than 10% and that’s a serious fluctuation that isn’t good for anyone.

“Currencies are a big chunk of what we do. What happens if we back out of Europe? We are all going to have to take a decision on where we stand.”

There are fears the pound – which is now around the $1.41 mark – could drop to $1.15 if Britain votes to leave the EU on June 23.

It is not surprising then
that the wine trade is overwhelmingly in favour of remaining in the EU. The Wine & Spirit Trade Association polled its members and found that 90% wanted to stay, 8% were unsure and just 2% wanted out.

WSTA chief executive Miles Beale said: “While all views were represented in our membership the vast majority is clear that the industry will better be able to invest, grow and create jobs if the UK remains in the Single Market.

“The industry needs a powerful UK voice within the EU to ensure we can shape and influence regulations that will impact on the trade and its access to the EU’s 500 million consumers.

“It is clear the UK spirit sector’s strong export performance and our place at the centre of the international wine industry is hugely positive for the UK and its consumers. There is real concern that this would be put at risk as a result of the UK exiting the EU.”

The trade is concerned about losing the benefit of the EU’s free-trade agreements with non-EU countries, potentially damaging the UK’s position as the world’s gateway to Europe.

Several are worried about complying with EU regulations without shaping them and are concerned about restricted access to the common market, while the effect on exchange rates is also a major cause for concern.

Steel at Connoisseur said: “Hopefully exchange rates will settle down in the next three months. I won’t change any prices. We will protect them.”

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