Whatever happens with Brexit, European wines will become more expensive
With Brexit negotiations still ongoing, having missed a number of deadlines, some things are certain - the new paperwork for importing wines from Europe will increase costs, limit choice and hit the fine wine market hard.
If you want to import wine from Australia into Europe, you need to provide an import form known as a VI-1. This form includes technical chemical analysis of the wine, including alcoholic strength, total sulphur dioxide, volatile acidity, in all 8 chemical signatures. If you are currently importing wine into the UK from within the EU this form is not required. The huge scale of the imports and the fragmented European industry which is filled with many small producers making many different wines, means that the number of forms could add an extra £70 million cost to UK wine drinkers according to the Wine and Sprits Trade Association, a wine lobby group.
The costs of the analysis are typically used by the EU as a non-tariff barrier to small producers outside the EU, increasing the cost and friction for them to compete with EU producers. But with Brexit, the British government is rolling out the forms that all other nations have to comply with to all EU producers.
Many in the industry claim the forms are not required and will simply add cost to doing business especially for small producers who do not export much volume to the UK. It is likely some will chose not to do so. But it is the fine wine business that is most likely to suffer. Many old fine wines that are imported into the country will also require these forms. If the wine costs £20,000 that is an expensive undertaking, with some fine wine traders deeply worried about losing a bottle to get the chemical analysis done. Worse still, very rare bottles with only 1 or 2 bottles remaining, simply will not be able to move to the UK.
Fine wine traders are responding by setting up trading hubs in Europe so wines can be traded, but older fine wines are not commodities. As the wine gets older and more valuable, issues such as provenance (where the wine came from), storage conditions and ullage (the wine level in the bottle) mean that each wine becomes an individual and for very rare and expensive wines the work to do the chemical testing will make the wines simply uneconomical to ship or trade and use local stocks to trade instead.