Ah naw! Not another story about the doom and gloom of Brexit; it’s enough to drive you to drink… exactly my cunning plan (in moderation of course.)
Yes it’s true, predications show that Brexit will have a major impact on the price of a bottle of wine. Below are some details from an FT report by Eshe Nelson on what we can expect.
We British and Irish have a reputation for liking a tipple. Last year, drinkers in the UK brought nearly £14bn ($18.2bn) worth of wine, or roughly 26 bottles per person, according to the IWSR. Almost all of it—99%—came from abroad, making the UK the largest per-capita importer of wine in the world.
For those who like to kick back with a Côtes du Rhône, party with Prosecco, or chill with Champagne, there could be trouble looming. More than half of the wine Britain imports come from the European Union, and Brexit threatens to squeeze the supply.
Already, the price of a typical bottle in UK wine shops has reached a record high. The average bottle of wine now sells for £5.56, a 3% increase from the end of 2016, thanks to the Brexit-induced plummet in the pound making imports more expensive, according to the the UK’s Wine and Spirit Trade Association.
Kym Anderson of the University of Adelaide and Glyn Wittwer of Victoria University used used their model of global wine markets to estimate the effect Brexit will have by 2025.
According to Anderson and Wittwer, the most severe Brexit scenario would push consumer prices for wine up by a staggering 22% by 2025, and the volume consumed would drop by 28% as a result. Under their less severe scenario, prices would be 11% higher and consumption would fall by 17%. The pound has already lost 14% of its value against the euro since the Brexit vote in June last year, so it’s not that hard to imagine the shocks envisioned by these scenarios.
According to Miles Beale, chief executive of the WSTA, the UK is already losing its reputation as a key player in the wine world, and Brexit will accelerate this decline. Anderson and Wittwer’s study is “helpfully terrifying,” he says.
Should we be worried? In a word no; in my humble view, prices will rise, however some county will fill the void for less expensive wine. The reality is it won’t be very palatable. The wine industry needs price increases to reinvest and make production profitable. If people want to continue to drink good bottles of wine, they’ll have to pay more; it’s as simple as that.
Well at least I got to create a new word: Winexit.
Quote of the month:
“The best tonic is one with a gin in it.”
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