Government accused of failing to count the true cost of wine import certificates
The Wine and Spirit Trade Association (WSTA) has hit out at the Government for “misleading the public” over claims that EU wine importation costs would be “nil or negligible”.
The Government’s claims come months after discussions with the WSTA originally led to an agreement to suspend the costly paperwork. Despite this initial recognition of the burden it would place on UK wine businesses, the WSTA said the Government then proceeded to U-turn on this promise at a later date. The WSTA argues therefore that it is “inconceivable” that they are not aware of the sizeable cost to business.
Prompted by a question from Tim Loughton, MP, on Tuesday, Defra was asked to assess the cost of VI-1 import forms on all EU wines, which would follow a No Deal Brexit.
The WSTA has challenged the reply given by Victoria Prentis, Under Secretary of State for Defra, and accused her of “misleading Parliament by ignoring the £70 million bill anticipated by British businesses from the extra red tape”.
Last year the WSTA warned that the new inspections for imported EU wine would generate over 600,000 customs forms, which is anticipated to treble the inspection board’s workload overnight.
EU wine producers will inevitably pass some, or all, of these costs on to UK importers and customers meaning that UK wine businesses, especially High Street specialist merchants, will suffer, the WSTA said.
As well as putting a huge burden on the UK wine industry the WSTA warns this will lead to higher wine prices - adding an estimated 10p on a bottle of wine - and a reduced choice for consumers.
In reply to the question Prentis said: “As inspections for imported wine are undertaken on a risk-based percentage, regardless of origin or import certification, no specific assessment has been made regarding additional costs of controls, although it is expected to be nil or negligible.”
Miles Beale, Chief Executive of the WSTA, said: “The Minister has been highly selective in focussing on the costs falling on UK enforcement bodies of requiring import certificates for EU wine and has chosen to completely overlook the significant costs falling to exporters, costs which will have to be met by UK importers and ultimately UK consumers if we leave without a deal.
“It is extremely disappointing that despite four years of discussing this issue with Defra the facts have fallen on deaf ears and the Minister has confirmed that the government has not even bothered to make any assessment.
“Far from taking back control, simply rolling over and having to bend to existing EU law which disadvantages wine imports makes absolutely no sense for a nation of wine lovers that imports 99% of the wine we enjoy. This government needs to wake up, listen to business and start taking action that supports economic activity and job creators. And it doesn’t have long to do it!
“We have long supported a risk-based approach to inspection, but the costs of additional VI-1 forms for EU wines will not be ‘nil or negligible’ – the truth is that for UK wine SME businesses they will be catastrophic and are likely to put people out of business. But it’s not just British business which will suffer, Britain’s 33 million wine lovers will too. The cost of wine will go up and consumers will see some of their favourite wines disappear from the shelves.”
John Charnock, managing partner at Jascots Wine Merchants, said: "As a company that has had to substantially alter our business model to deal with the outbreak of Covid-19 and subsequent lockdown, we have faced significant challenges to stay viable as a business.
"It was hugely disheartening, therefore, to hear that the Government has continually overlooked what businesses like us and the WSTA have been saying for years now - this avoidable additional cost must be recognised and taken seriously - we cannot afford additional burdens on our business at this most trying time."
John Colley, chief executive of Majestic Wine, said: "As the UK’s largest specialist wine retailer, at Majestic we would urge the Government to look again at what the WSTA has said on this issue and help to protect prices on wines that millions of people enjoy across the country.
"Over 60% of the bottles we sell come from the EU, and a requirement to introduce new, costly and burdensome VI-1 forms to keep wine flowing at the end of the Transition period would, both inevitably and unfortunately, lead to price increases for our customers.
“There are potentially serious implications if this is not addressed, both for those of us working in the wine industry - and for the 33 million wine drinkers across the UK. The government needs to listen to what our industry body is saying, to make an assessment and take steps to remove any prospect of introducing costly red tape that would strangle British businesses like Majestic Wine."
Last month the WSTA once again wrote to the Chancellor of the Duchy of Lancaster, Michael Gove MP, reiterating its calls to suspend the damaging additional documentation and tariffs on wine and offered, post lockdown, to facilitate a visit to a wine business to see at first hand the potential impact that VI-1 implementation would have. He is yet to reply.