Alcoholic beverages sector responds to Brexit
That Great Britain will leave the EU seems to have become inevitable. After 51.9% of the population voted to leave the EU, people are going to have to face facts. Of course, the question now is what the consequences will be for the economies of the EU countries, Great Britain, and indirectly the economies of and trade in the rest of the world. Changes will take place in each industry in the near future, but particularly in the realm of import and export these changes will be huge, and thus also in the British alcoholic beverages sector.
To list the possible effects of Brexit, the wine sector can be used as an example. Rowan Gormley, CEO of Majestic, predicts that wine, like many other imported goods, could significantly increase in price. Gormley expects that the continuously dropping value of the pound in response to Brexit will cause all imported products to increase in price. Wine will not be an exception to this. In addition, he states that higher prices will not allow the market to grow. Thus, his predictions are negative.
Commotion has also arisen in other sectors. Both the WSTA (Wine and Spirit Trade Association) and the SWA (Scotch Whisky Association) campaigned for Great Britain to remain a member of the EU. A questionnaire amongst 300 WSTA members revealed that 90% wanted to remain in the EU.
A representative of the SWA says that leaving the EU constitutes a huge risk to the industry, resulting in potential damage to exports of £1 billion and the endangering of 40,000 jobs, assuming that British manufacturers are prepared to phase in bureaucratic trade barriers that apply to trade with European companies, once Great Britain has left the EU.
These associations are not the only parties on British soil who would have liked to stay in the EU. In fact, the majority of British businesses were not in favour of Brexit. Amongst other things, this can be concluded from an open letter by more than 200 top executives that featured in The Times.
In conclusion, it looks like the situation will not have positive repercussions for the alcoholic beverages sector, much like the rest of British businesses. However, there are rumours that Great Britain will be allowed to continue to take part in the internal market, which would give the situation an entirely different twist.