Starting a new column for Rattle, the good folk at Great Grog independent wine dealers ponder what an EU exit would mean for wine prices.
If we come out of Europe, how will this affect the way we trade with the Europeans, and most importantly, how will this affect the wine we drink?
Every bottle of European Union wine sold here has £2 UK duty on it. This is how the breakdown “on the shelf price” is worked out for a wine costing £1.50 at a EU winery; £1.50 for the wine + 30p haulage + £2 UK duty + £1.75 retailer profit + £1.10 vat = £6.65. Yes, quite depressing that your £6 wine is mostly tax.
We also currently pay a weird European tax called “countervailing duty” on every bottle of wine that comes in from outside the EU. This amounts to about 10-15 pence on every bottle, which chucks your wine up to £6.80. The exact amount varies daily depending on how much trade in general the European Union is doing with that specific country. So, for instance, it is affected by how many sheep or pigs or cars or whisky & so forth goes back and forwards through the ports in the EU from that country. It is amazingly complex to calculate, taking an army of Euro-crats to figure it out.
This tax isn’t applied to European wines. However, every bottle of South African, Chilean etc. has it but every bottle of French is exempt. Does this mean that wine from outside the EU will get slightly cheaper if we were outside the EU? On the counterside, would French & Italian & Spanish get dearer?
It may seem like a small concern in the wider referendum, but it is important because once the old trade deals are ended, nobody can know what the new ones will be like. It is incredibly rare that prices come down when new deals are done – usually its an excuse to make things more expensive. What happens to wine will apply across the board – new deals creating new prices for cheese, ham and all the good things in life.
I know what I’m going to do. I’m going to be filling my garage with wine from all over the world, as ever. I am going to use the referendum as an excuse to panic buy (if my wife asks) as one thing’s for sure, wine imports will get more complex & possibly more expensive if there is an EU opt out.
Great Grog are a Scottish independent only selling wine that’s been tried and tested