The UK government is reportedly considering backtracking on an agreement concerning costly paperwork on wine imports and exports to and from the EU in the event of a ‘No Deal Brexit’, which could cost the industry millions of pounds and see imports from small European producers dry up.
As reported by industry body the Wine and Spirit Trade Association (WSTA), a No Deal exit from the European Union could see paperwork for wine imports and exports almost treble and incur considerable financial cost.
The WSTA and Whitehall officials apparently held a series of talks earlier this year in which it was agreed that paperwork on wine imports could be held off for up to nine months if Britain left the EU with no trade agreements, leaving time to develop faster and fuss and cost-free import rules.
Now the WSTA said it has learned that government ministers are planning to ignore this agreement in a move which the WSTA’s chief executive Miles Beale has called a “real blow” for the industry.
The trade body has warned that the 600,000 additional import certificates (called VI-1 forms) that will be generated as a result of imposing yet more red tape will cost the drinks industry as much as £70 million collectively.
Currently all imports an exports are tracked electronically through the EU’s Excise Movement Control System (ECMS) but without a trade deal with the EU a new paper system will have to be implemented.
European wine producers will have to pay to fill in a VI-1 form and have extra laboratory tests done on every consignment, a burden that will likely be too much for small producers.
As the WSTA said in a statement: “But the extra form filling won’t just leave the wine industry with a headache, UK wine inspectors will find themselves drowning in processing the paperwork.
“Every handwritten VI-1 form will have to be scrutinised and stamped before wine from Europe is allowed into the UK.
“It is estimated that it would take 12 full time wine inspectors a whole year to process the half a million new VI-1 forms expected to mount up after a no deal Brexit. This does not take into account the other work carried out by Wine Standards who currently consist of a team of six regional inspectors.”
Coupled with wine duty hikes, possible introduction of wine tariffs, rising inflation and a weaker pound, the price of wine, at least from the EU which comprises 55% of the wine consumed in Britain, could spike sharply.
Beale said: “The Government’s failure to honour commitments to suspend the VI1 forms is a real blow for the UK wine industry. The additional form filling and laboratory tests required for a no deal scenario will add a massive burden on exporters and importers alike. Wine inspectors will find themselves drowning in paperwork and consignments are going to be held up by unnecessary additional red tape.
“We can only conclude from this that Government doesn’t understand the value of the UK wine industry nor the value of imports in general to the UK economy. Imports are worth roughly the same as exports to the UK economy. The burden of import certificates for wine will not simply fall on EU businesses – their pain will be shared by UK importers and ultimately UK consumers. There is however a simple solution, suspend the introduction of pointless import certificates and use the time to develop modern import rules that are fit for purpose.”
Neil Coyle, MP for Bermondsey and Old Southwark and the chair of the All-Party Parliamentary Group (APPG) for Wines and Spirits added: “This u-turn is yet another example of government failing to listen to industry experts and ultimately failing to back British business. The worst case assumptions outlined in the Yellowhammer contingency plan are likely to become a reality if we end up with a disastrous no-deal Brexit.”