It has been one of the coldest springs in recent memory and at the Ridgeview wine estate on England’s south coast, staff have been on nightly “frost watch”, waking some nights at 3am to light paraffin candles to save their vines’ tender emerging shoots.
But for Brandon Barnham, sales manager at Ridgeview in West Sussex, which produces about 400,000 bottles a year of some the UK’s highest-rated traditional method sparkling wines, it is not just the unseasonably cold night-time temperatures that have been threatening to retard growth.
Almost four months after new post-Brexit trading arrangements came into force, the industry behind English sparkling wine — playfully dubbed “Brexit juice” in some corners of Westminster — is now warning that new costs and red tape are crimping future export plans.
“It’s been really difficult to get freight companies to even offer to transport a pallet to the EU,” said Barnham. “I am trying to get a pallet to Holland at the moment, but three or four companies who used to deliver for us in the past have refused to even quote. Those that will quote are offering prices of £500 to £700 a pallet compared to £140 before Brexit.”
WineGB, the trade association for English and Welsh wine, has estimated that new customs paperwork and labelling requirements for imports into the EU add up £5 to the cost of a bottle of English sparkling wine at retail in Europe and £8 to £10 on a restaurant wine list.
While UK sparkling wine exports remain modest, the trade body says they more than doubled in 2019 to 550,000 bottles and the industry is growing rapidly after an investment spree that has seen almost 6m vines planted in southern England over the past five years.
Annual production has also more than doubled since 2017 to more than 10m bottles a year and — frosts permitting — could hit 25m bottles a year by the end of the decade, with annual exports of 3.75m bottles, or a sevenfold increase on current levels.
This would still trail the levels of production in other leading wine-growing countries. For example, the French champagne house Moët & Chandon produces an estimated 38m bottles a year.
But Simon Thorpe, chief executive of WineGB, said the industry needed the government to work harder to reduce Brexit-related barriers as the industry looks to develop EU markets in an effort to diversify risk and find a home for production that cannot be sold in the UK.
At present, Norway is the top destination for UK sparkling wine, taking 20 per cent of exports, with Sweden and Denmark — which take 7 per cent and 4 per cent respectively — identified as markets for strong potential growth.
“We’ll want to develop those markets, including traditional champagne-purchasing markets in coming years, so there has to be a solution found to these problems. This has to be resolved if we’re going to be able to fulfil our export potential,” he said.
Difficulties trading with the EU were also complicating exports to non-EU destinations, Barnham added, because they were either transiting across the EU or, for countries such as Taiwan and Japan, exports were sent via export hubs inside the EU single market.
The boom in the UK wine industry has seen French champagne houses such as Taittinger and Pommery invest in the UK where vineyards in Kent, Sussex and Hampshire take advantage of cooler climes and longer growing seasons than in the Champagne region to produce wines that are now matching French competition in blind tastings.
Duncan Brown, deputy chair of WineGB’s export working group, said while post-Brexit paperwork, including wine export self-certificates and T1 forms for shipments transiting the EU were ultimately manageable from a bureaucratic standpoint, they were creating significant costs.
Customs clearance administration was costing about £150 per pallet — or 32p per bottle — which is only the first layer of additional cost for wines already fighting to compete at a similar price point of about £30 to £40 a bottle for champagne which has a far more established brand.
New labels needed to meet EU requirements for importer details and health warnings for sulphite content and pregnancy in some countries — all of which must be in local languages and conforming to local standards — add a further cost of £1.10 per bottle for a run of 2,500 labels.
“We are still a young industry — the modern era really only started in the 1990s — and we’re only just starting to accelerate. We can grow domestic sales, but we’ll need to export more and more,” Brown added.
The industry is pushing the government to step up support to wineries. Miles Beale, chief executive of the Wine and Spirit Trade Association, said the government could take steps to relieve some of the unnecessary costs and complications and help trade to flow.
These included lowering excise duty rates, making it easier to import equipment by getting rid of tariffs and consolidating more tariff codes to reduce red tape on a declaration form for a “mixed” load of products on a lorry, known as “groupage”.
“It would also be extremely helpful to see more support for [customs] intermediaries so they can cope with groupage,” he added, urging the Department for International Trade to step up assistance to smaller exporters.
The UK’s agriculture ministry, Defra, said that simplified wine certification arrangements agreed between Britain and the EU ensured that UK wine “can be exported freely to the EU” and that leaving the bloc allowed the UK to address barriers to wine trade and drive market access around the world.
Back at Ridgeview, where English customers are sitting in the spring sunshine enjoying plates of local charcuterie and a glass of the estate’s fizz, Barnham says any assistance will be welcomed to help shift a product for which he passionately believes international appetites will only grow.
“First it was ‘teething problems’ and then it felt things were improving and we were getting more and more information and clarity, but in recent times things haven’t really moved on,” he said. “It feels like it’s at a stalemate.”
Source: Economy - ft.com
