Much has been written about the Brexit effect for those who sell wine on either side of the English Channel, be they wine producers, brokers, retailers, importers or wine merchants. While one of the key benefits of Brexit was meant to be freedom from red tape, it hasn’t – so far – worked out like that, many claim, with the complicated bureaucracy of import and export seemingly becoming more complex.
But what does it mean for you, the fine-wine lover, who just wants a bottle for your table or a case for your cellar? There is talk of wine going up in price as a result of more administrative costs, and a scaled back choice of wines as a result of some producers deciding it’s not worth the hassle – but is this really the case? And if so, how much of an increase are we talking about, and which wines are we going to see less of?
David Gleave MW, managing director of major distributor Liberty Wines, makes a complex situation very clear: “All shipments from the EU are now more expensive. Export and import documents must be compiled. In some cases, the importer (such as Liberty Wines) will pay for both; in others, the producer will pay for the export documentation and the importer will cover the costs of the import documentation.”
Brexit is a many-headed monster. Few had foreseen, for example, the simple process of getting a tasting sample from the EU into the UK would become a nightmare. Brett Fleming, managing director of Armit Wines, is just one of many importers whose Burgundy en primeur tastings in January were ruined by samples being held up at customs. “And they’re still there,” he notes. Others tell of samples arriving – but with a VAT bill accompanying them, for unpaid charges.
It’s not just wine coming into the UK. Mike Battye, managing director of Freight Transport Ltd, one of the UK’s major wine shippers, used to send 10 pallets of wine a week back to the EU from merchants reselling en primeur wine to negociants. “That trade has disappeared. We can’t find a way to do it. It used to be a simple EAD [Export Accompanying Document] from London to Bordeaux. That’s impossible now.”
The Government (and some wine merchants) say these are just teething problems; others suggest it is more like root-canal surgery without anaesthetic. Whatever the outcome (and seasoned veterans like Battye fear the situation is going to get worse) the fact is that UK wine drinkers are likely to be dealing with a very different wine landscape in the long term. How it will affect you depends very much on whether you’re a consumer or a collector, an everyday drinker or well-heeled connoisseur.
Will the Brexit effect push fine-wine prices up?
Brexit has an impact on every level of wine, although there’s a difference of opinion as to how much fine wine is going to be impacted. As far as price is concerned, it’s the entry-level wines (those around £12-£15) that are going to be affected the most, simply because a £1-per-bottle increase is far more noticeable here than on a £45 wine. But the increased difficulty of sending wine to the UK is going to put off producers at every level. The paperwork “will make some producers question doing business with the UK,” Fleming says. “Smaller icon producers will simply sell their wines to Asia, the US or Russia.” If you’re in Northern Ireland, things are even more complicated, as any UK company sending goods there is now an exporter. One major distributor told Club Oenologique they had ceased all trading with Northern Ireland for the time being. “We’re not set up to handle exports – we’d need a totally new administrative function and we simply don’t have the systems to do that.”
So we’re going to get less choice at all levels?
Yes. According to Greg Sherwood MW at Handford Wines, whole categories of entry-level wines may become much more difficult to find. “If a whole category picks up a pound or two, it can kill that category. If you buy a few cases a year of a £12.95 Côtes du Rhône and suddenly it goes up to £15, then that can tip it from being a large seller to a wine that trickles off the shelves.”
Which categories of wine are we talking about?
All those regions that produce dependable, consistent, high-quality, everyday drinking wines at reasonable cost. Sancerre, Bordeaux Supérieur, Côtes du Rhône, Chianti Classico, Rioja. Most of these wines are produced – and sell – in such quantities that they will be OK, but any product with a finely balanced price point that becomes volatile can very quickly lose its place in the market.
What about small, moderately-priced independent wines?
They may fall victim to the failure of the groupage system, whereby a truck full of wine leaves Bordeaux for the UK, with wine from dozens of different locations destined for a handful of wine merchants in London. Some producers will have 10 cases on board, others will have 500 cases. It works well – until you introduce multiple new forms and customs checks, and new requirements such as the need to put the name of the importer on the label.
“For any borderline niche producer, the cost and the hassle are prohibitive,” says Gavin Quinney of Château Bauduc in Bordeaux’s Entre-deux-Mers. Quinney, who sold €1m of wine direct to UK consumers in 2020, says that economies of scale mean that his business will not be badly affected. But, he adds, “It seems inevitable that anyone sending wine to the UK will have to cut their product lines back to the stuff that really sells.”
Which wines are we going to see less of?
The interesting, small-volume wines that are the mainstay of small independent wine merchants. Daniel Lambert, the Welsh wine importer who has spent the past few weeks getting very angry indeed about the situation, told wine trade website The Buyer: “Any discerning independent wine merchant… will no longer be able to operate as they have before. It’s simply uneconomic to be spending hundreds of pounds more on selling or buying a pallet or two of wine, unless you are prepared to put all that extra cost on to the average price of a bottle of wine.”
Victoria Stephens-Clarkson MW, who runs the Little Fine Wine Company, which specialises in half-bottles, is specific: “We have a great Greco di Tufo which sells well given it’s a relatively rare grape variety from Campania in South Italy, but it simply hasn’t made sense for the importer to ship it, so we will be out of stock for some time.”
What exactly has made the system so difficult to navigate?
The bureaucracy of import-export has always been complicated, but now it is byzantine. In addition to the time spent filling in forms (a thicket of acronyms from the EAD to EX1 via C88 and EMCC) the extra cost is considerable: an EX1 export form, for example, has to be completed by a specialist broker at a cost of £75. “A palette from France used to cost around £200,” says Mike Battye. “Now you add the EX1 cost, and full UK customs clearance which costs £55 if the wine’s bonded, then additional freight costs, and you’re quickly up to £400.” For the biggest operators, this sort of cost is absorbable, but if you’re a smaller château wanting to send, say, 10 cases to the UK, “you may as well forget it.”
I’m far more interested in my fine wine than in Tuesday-supper wines from petit châteaux. How is my cellar going to be affected?
As Matthew O’Connell of Bordeaux Index has argued, at the top level (en primeur Bordeaux and Burgundy, for example) merchants reckon there’s going to be less impact. If you’re spending hundreds of pounds on a bottle, a few quid extra isn’t going to worry you. There are going to be logistical difficulties, of course, and as Brett Fleming says above, many producers are just going to think the UK is too much hassle. But, as with many things in life, the higher the cost, the smoother the purchasing process.
If you’re a customer of Hedonism in London’s Mayfair, you will have little to worry about. “So far, prices of fine wines have not been affected,” says general manager Julien Le Doaré. “There is a possibility that prices will marginally increase due to the extra customs clearance, but this will mostly affect the lower end of the wine market, and most certainly the ones retailed at less than £25.” He also makes clear that there might be a few days’ delay on getting your wines, but any costs incurred will be absorbed. O’Connell agrees: “Any increased costs will put upwards pressure on prices but for fine wine this will likely have limited impact.”
Lockdown has depleted my cellar – should I be re-stocking or should I wait until things calm down?
Fleming notes that Brexit uncertainty means people are buying less, and because no one is going out, they are “starting to drink their cellars”. This means they have gaps they need to fill, and Armit is seeing an increased interest in older vintages. “When we do our six-monthly release of back vintages, we normally expect to sell through in six to eight weeks. The last offer went in 48 hours.” In other words, don’t alter your buying habits too much – or your merchant might forget about you.