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Boris hears first-hand what UK wine industry needs from Brexit

Foreign Secretary Boris Johnson MP toured the UK headquarters of the world’s largest family owned wine producer to find out how Brexit will impact the wine trade.

The visit to E&J Gallo’s offices in Uxbridge was organised by the Wine and Spirit Trade Association to help Mr Johnson understand the central role the UK plays in the global wine industry.

The MP for Uxbridge and South Ruislip was shown around Gallo’s offices in his constituency from where it has been operating for over 25 years.

Gallo is a family owned US wine company which produces and distributes wines across the world. 

Wine from Gallo’s Californian vineyards is sent in both bottle and bulk to the UK. The majority of which is sold in the UK and the rest re-exported across Europe and beyond. 

Gallo’s UK operation is a great example of how wine producing countries use the UK as a hub for international trade. By visiting Gallo, the Foreign Secretary could see how important the UK is in the worldwide wine trade and how much it relies on a balance of imports and exports.  

The UK wine industry sits second as the largest global importer by value and volume (behind USA and Germany respectively).

Despite being predominantly imported; the UK wine industry supports over 270 thousand jobs.

Over 99% of wine consumed in the UK is imported and just under 60% of wine, by volume, imported into the UK comes from outside the EU, two thirds of which is bottled in the UK.

The UK boasts Europe’s biggest wine bottling plant in Avonmouth. It is also home to bottling plants along the Manchester Ship Canal and in Norfolk, these are just a few examples of how the UK wine industry boosts local employment. 

In duty alone, the UK wine industry contributes £9.1billion to the public purse.

Chief Executive of the Wine and Spirit Trade Association, Miles Beale, said:

“Our message to government is to take the opportunity post Brexit to enhance trade by removing all unnecessary regulatory barriers and allow goods to flow more freely between the markets. It was great to have an opportunity to impress upon the Foreign Secretary, Boris Johnson, how essential it is that when we leave the EU we have agreements in place which maintain existing trade flows. Britain needs to hold onto its position as the international hub in the world wine trade to further boost the UK economy and provide more jobs.”

Rt. Hon. Boris Johnson MP said: 

“It’s been fantastic to visit another international business that has chosen to locate in Uxbridge and South Ruislip. After 25 years in Uxbridge, E&J Gallo is an important part of the commu-nity and local employer. I was fascinated to learn of their involvement along the whole supply chain, even owning sand mines to make their own bottles!”

Paul Sorrentino, VP and general manager at E&J Gallo Winery, said:

 “It was a pleasure to have Boris Johnson come visit our office.  Our EMEA office is based in Uxbridge and has been for many years, so it was a real delight for the team to meet our local MP.”

Theresa May addressed the World Economic Forum in Davos, Switzerland, last month where she told delegates that the “UK will continue to be a global advocate of free trade”.

The WSTA visit to Gallo was arranged to show the Foreign Secretary first-hand how the UK wine industry would greatly benefit from the PM’s commitment to securing free trade agreements.

Foreign Secretary Boris Johnson MP toured the UK headquarters of the world’s largest family owned wine producer to find out how Brexit will impact the wine trade.

The visit to E&J Gallo’s offices in Uxbridge was organised by the Wine and Spirit Trade Association to help Mr Johnson understand the central role the UK plays in the global wine industry.

The MP for Uxbridge and South Ruislip was shown around Gallo’s offices in his constituency from where it has been operating for over 25 years.

Gallo is a family owned US wine company which produces and distributes wines across the world.

Wine from Gallo’s Californian vineyards is sent in both bottle and bulk to the UK. The majority of which is sold in the UK and the rest re-exported across Europe and beyond.

Gallo’s UK operation is a great example of how wine producing countries use the UK as a hub for international trade. By visiting Gallo, the Foreign Secretary could see how important the UK is in the worldwide wine trade and how much it relies on a balance of imports and exports. 

The UK wine industry sits second as the largest global importer by value and volume (behind USA and Germany respectively).

Despite being predominantly imported; the UK wine industry supports over 270 thousand jobs.

 

Over 99% of wine consumed in the UK is imported and just under 60% of wine, by volume, imported into the UK comes from outside the EU, two thirds of which is bottled in the UK.

 

The UK boasts Europe’s biggest wine bottling plant in Avonmouth. It is also home to bottling plants along the Manchester Ship Canal and in Norfolk, these are just a few examples of how the UK wine industry boosts local employment.

 

In duty alone, the UK wine industry contributes £9.1billion to the public purse.


British Gin breaks £500m export barrier

Exports of British gin have broken records again this year, with sales overseas breaking the half a billion-pound mark for the first time.


The latest figures from HMRC show that £530 million worth of British gin was sold abroad in 2017.


This is the equivalent of around 189 million (70cl) bottles of British gin exported last year up from around 177 million bottles in 2016.


Thanks to a surge in popularity in the juniper-based spirit, which has been dubbed the ‘ginaissance’ British gin exports have more than doubled since 2008 when sales overseas were worth £258 million.


Britain sends more gin around the world than it does beef, and exports of the spirit have increased 12% by value and 7% by volume, in the last year.


The WSTA correctly predicted last year that the UK’s gin producers would see £500m in exports in 2017, and with gin’s popularity showing no signs of waning either abroad or here in the UK, the organisation are now predicting that gin will be a £2 billion industry by the end of 2018.


The USA remains the largest importer of UK gin, with sales to the US worth £184 million, up almost £12 million on 2016.


By region, the EU is still by far the biggest destination for UK gin, with the European market seeing growth of 16% last year. Within the EU, Spain is the largest market, with £100m of gin sales, meaning that the Spanish gin market is bigger than the next five markets (Germany, Italy, France, Greece and Belgium) combined.


Whilst a much smaller slice of total sales, Asia and Oceania both saw growth. There is lots of potential, the WSTA argues, for exporters to capitalise on the thirst for all things ‘Brand Britain’ in emerging markets.


WSTA Chief Executive, Miles Beale, said:


“It has been another phenomenal year of export growth for our British gin producers. There’s no doubt that those overseas are drawn to the quality of gin made here – but gin is also a quintessentially British spirit, and perfect for anyone looking to tap into Brand Britain overseas.


“We are, by some margin, the largest exporter of gin in the world, with huge potential for growth, and our industry needs to take further advantage of this. On leaving the EU, we want more government support to increase exports to developed markets such as Australia, Japan, China and the US. The removal of tariffs would allow Britain to maintain its position as the world's largest spirits exporter and further boost the UK economy and provide more jobs.


"The WSTA have visited key markets overseas, like Copenhagen, Madrid, and Tokyo, to help promote exports of British spirits, and will be going back to Tokyo, and visiting Hong Kong, later this year.

“Ambassadors and senior diplomats can start supporting our mission to help gin exports grow even further by committing to serve British gin at events both home and abroad."

Domestic gin sales hit £1.2 billion in 12 months (to Sept 2017), with Brits buying the equivalent of over 47 million bottles of gin. This is up 7 million bottles compared to the same period the previous year. 

A YouGov poll recently found gin is now the most popular spirit with 29% of drinkers voting it their favourite spirit tipple.

To find out more about British gin exports go to @Optawine's latest blog - http://www.wsta.co.uk/blog/entry/yearly-gin-exports-reach-500m

 

Wine and spirit industry sets out why government must make free trade with Australia and New Zealand a priority

The Wine and Spirit Trade Association has called on government trade negotiators to remove all existing tariffs to allow the UK to enhance trade with Australia and New Zealand when the UK leaves the EU.

In a submission to the Trade Select Committee last week the WSTA called for new bilateral agreements to be a priority after Brexit.

Currently the tariffs on wines imported from Australia and New Zealand into the UK work out at around 10-12p added to a bottle of still wine and 22p on sparkling wine.

In return British spirits being exported to our Antipodean cousins pay an extra 5% of the value of their products to get them into the country.

These barriers push up the price for consumers who already pay a huge whack when the UK’s excessively high duty levies are added on. Britain has some of the highest duty rates in the world pushing the price of a bottle of still wine up a further £2.16 and £2.77 on a bottle of sparkling.

The tariffs also stifle the vibrant UK wine and spirit businesses who rely on huge volumes of wine imports coming to the UK and vast exports of British spirits going the other way.
Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said:

“In her speech in Davos this week the Prime Minister said the UK intends to be at the forefront of championing new trade deals. We welcome this and call on government to take the opportunity post Brexit to enhance trade with Australia and New Zealand by removing all unnecessary regulatory barriers and allowing goods to flow more freely between the markets. Australian wine is the most popular wine drunk in Britain and growth of New Zealand wine sales are outpacing any other country. Australia and New Zealand import more spirits from Britain than any other country.

“A tariff free trade deal is therefore a win-win for industry and consumers on both sides of the world and it is something we have been talking to our trading partners and politicians down under about since the vote to leave the EU. There is strong support on both sides for this sort of bilateral trade agreement which should become a blueprint for our future trade agreements with other countries outside the EU.”

Theresa May addressed the World Economic Forum in Davos, Switzerland, on Thursday where she told delegates that the “UK will continue to be a global advocate of free trade”.
In 2016, Australian wine exports to the UK were worth £1.5bn in sales, whilst UK spirits exports to Australia were worth £613m in sales.

In the same period sales of New Zealand wine in the UK were worth £618m and sales of UK spirits exports in New Zealand were worth some £50m. Helping New Zealand to become the fifth largest wine exporter to the UK by value.

The WSTA estimate that customs tariffs on wines entering the UK from Australia and New Zealand amounted to some £35m in 2016.

Over 80% of Australian wine, and over 40% of New Zealand wine, exported to the UK is shipped in bulk where it is bottled and some of it re-exported to the EU and Norway.

The removal of tariffs would allow Britain to maintain its position as the international hub in the world wine trade further boosting the UK economy and providing more jobs.

The Australian and New Zealand wine and spirit sector contributes to around 37,000 jobs directly and a further 22,000 jobs indirectly.

The UK is the world’s largest spirits exporter, with approximately 45% of exports going to the EU. On leaving the EU, UK spirits will need to increase exports to developed markets and Australia and New Zealand are a target market.

The number of distilleries in Britain has more than doubled in the past five years and there are now 315 distilleries, up from 152 in 2013, according to figures from HM Revenue & Customs. To sustain new and innovative brands, developed markets such as Australia and New Zealand will be key to their survival. The removal of spirits tariffs applied to UK exports will be a huge boost for British spirit makers.

The WSTA is calling on government to take advantage of the groundwork that has been done for them by the WSTA and to secure a free trade deal with Australia and New Zealand.

European wine and spirit trade unite to go head to head with Barnier’s Brexit Taskforce

The Wine and Spirit Trade Association yesterday (Thursday) met the EU Commission’s top Brexit negotiating team in a bid to move trade discussions forward.

Trade Association representatives from both sides of the Channel sat down with Michael Barnier’s taskforce to explain why it’s in everyone’s interest to keep the trade of wine and spirits flowing after Brexit. 

Last year the WSTA teamed up with the Scotch Whisky Association (SWA), spiritsEUROPE and the Comité Européen des Entreprises Vins -  to nail down key issues long before the Artticle 50 deadline expires and calling on politicians on both sides to do the same. 

The result was a ground-breaking Brexit position paper agreed by all parties, in October, on how best to move forward with trade when Britain leaves the EU.

The same top team of trade representatives gathered at the Commission’s iconic Berlaymont building at the heart of the Brussels EU district to drive home the messages in the joint paper. In particular they focused on the importance of reaching a negotiated settlement – with a sensible implementation period and ground breaking new free trade deal.

Chief Executive of the Wine and Spirit Trade Association, Miles Beale, said:

“The Brexit position paper makes clear that partners in the wine and spirit trade right across Europe strongly support the UK and EU securing a comprehensive trade agreement. All of us want a solution that enables us to continue to do business after Brexit and to ensure UK and EU consumers will be able to continue to enjoy the full range of products.  

The next step is to bring the politicians onboard and that is what the meeting with the Brexit taskforce aims to achieve. Time is running out and the economic importance to businesses on both sides of the channel to get this right cannot be over emphasised. 

We welcome this week’s agreement to revise the negotiating guidelines and in particular to define the terms of transition to bridge the period from March 2019 until our new trading rela-tionship is agreed.  And, we fully support, only one change of rules at the end of the process. The WSTA has, from the outset, been calling for a transition period. Frankly we need politi-cians to deliver continuity for our industry, and not to indulge in politicking that risks delay or damage to our industry and its businesses – on whichever side of the Channel they reside.”

According to a document titled EU Exit Analysis, leaked this week, growth is expected to be lower in each of the three different outcomes than if the UK had stayed in the EU. 

Miles Beale added: 

“The contents of the leaked document, which suggest that every part of the UK economy would suffer, reinforces the urgent need for trade associations to secure future trade – and provide business with certainty as soon as possible.”   

The wine and spirit sectors currently depend on the freedom of movement of goods, and benefit from the freedom of movement of people and capital within the EU. These benefits are currently extended to the UK as a result of EU membership, and ensure smooth transit of goods across the EU-28.

The wine and spirits industry has come together to urge the EU and UK to reach a negotiated settlement that preserves trade flows and avoid border tariffs and related administration costs.

The group made clear that it is the united position of wine and spirit producers across Europe that no deal is an unacceptable outcome from negotiations.

The UK is the world’s second largest importer of wine by both volume and by value and is a significant market for wines produced in the EU, whilst the EU represents a significant export market for British spirits. 

Wine and spirits traded between the EU and UK are not currently subject to tariffs, and unless the UK remains in the Customs Union, or a Free Trade Agreement is negotiated between EU and UK, this tariff-free environment would change post-Brexit.The Wine and Spirit Trade Association yesterday (Thursday) met the EU Commission’s top Brexit negotiating team in a bid to move trade discussions forward.

Trade Association representatives from both sides of the Channel sat down with Michael Barnier’s taskforce to explain why it’s in everyone’s interest to keep the trade of wine and spirits flowing after Brexit.

Last year the WSTA teamed up with the Scotch Whisky Association (SWA), spiritsEUROPE and the Comité Européen des Entreprises Vins -  to nail down key issues long before the Article 50 deadline expires and calling on politicians on both sides to do the same.

 

The result was a ground-breaking Brexit position paper agreed by all parties, in October, on how best to move forward with trade when Britain leaves the EU.

 

The same top team of trade representatives gathered at the Commission’s iconic Berlaymont building at the heart of the Brussels EU district to drive home the messages in the joint paper. In particular they focused on the importance of reaching a negotiated settlement – with a sensible implementation period and ground breaking new free trade deal.

 

Chief Executive of the Wine and Spirit Trade Association, Miles Beale, said:

 

“The Brexit position paper makes clear that partners in the wine and spirit trade right across Europe strongly support the UK and EU securing a comprehensive trade agreement. All of us want a solution that enables us to continue to do business after Brexit and to ensure UK and EU consumers will be able to continue to enjoy the full range of products. 

 

The next step is to bring the politicians onboard and that is what the meeting with the Brexit taskforce aims to achieve. Time is running out and the economic importance to businesses on both sides of the channel to get this right cannot be over emphasised.

 

We welcome this week’s agreement to revise the negotiating guidelines and in particular to define the terms of transition to bridge the period from March 2019 until our new trading relationship is agreed.  And, we fully support, only one change of rules at the end of the process. The WSTA has, from the outset, been calling for a transition period. Frankly we need politicians to deliver continuity for our industry, and not to indulge in politicking that risks delay or damage to our industry and its businesses – on whichever side of the Channel they reside.”

 

According to a document titled EU Exit Analysis, leaked this week, growth is expected to be lower in each of the three different outcomes than if the UK had stayed in the EU.

 

Miles Beale added:

 

“The contents of the leaked document, which suggest that every part of the UK economy would suffer, reinforces the urgent need for trade associations to secure future trade – and provide business with certainty as soon as possible.”  

 

The wine and spirit sectors currently depend on the freedom of movement of goods, and benefit from the freedom of movement of people and capital within the EU. These benefits are currently extended to the UK as a result of EU membership, and ensure smooth transit of goods across the EU-28.

 

The wine and spirits industry has come together to urge the EU and UK to reach a negotiated settlement that preserves trade flows and avoid border tariffs and related administration costs.

 

The group made clear that it is the united position of wine and spirit producers across Europe that no deal is an unacceptable outcome from negotiations.

 

The UK is the world’s second largest importer of wine by both volume and by value and is a significant market for wines produced in the EU, whilst the EU represents a significant export market for British spirits.

 

Wine and spirits traded between the EU and UK are not currently subject to tariffs, and unless the UK remains in the Customs Union, or a Free Trade Agreement is negotiated between EU and UK, this tariff-free environment would change post-Brexit.

Gin boom sparks surge in distillery openings in 2017

Britain now boasts 315 distilleries in the UK – more than double the number that were operating across the country five years ago.


New HMRC figures reveal that a total of 49 new distilleries started up in 2017 – seven closed – which adds a further 42 distilleries to the total number operating in the UK.


22 of these were in England and a further 20 opened in Scotland, four more opened in Wales and another three set up in Northern Ireland.


Just five years ago, in 2013, there were only 152 distilleries operating in the UK, the majority of which were located in Scotland.


Since then Britain has been in the grip of a ‘ginaissance’ with a record number of bottles of gin sold last year and an estimated 95 different gin brands on the UK market.


Distilleries in the UK are now diversifying and taking advantage of Brits love of cocktails with an increasing number of new whiskies, vodkas, rums, brandies and liqueurs appearing every year.


Experts are predicting that the growth in UK distilleries will continue this year after the industry received a boost from the Chancellor when he froze spirits duty in his November budget. 

Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:


“Gin is the key driver behind the surge in new distillery openings in the UK in the last five years. New gin brands continue to pop up on our supermarket shelves, on a regular basis, as Brits show no sign of tiring of the quintessentially British spirit. It wasn’t that many years ago when a pub would stock one gin brand and now a gin menu offering a range of gins and mixers is common place in our pubs and bars. It is welcome news that another 49 new distilleries opened in the UK last year brining new jobs to the British spirit industry and helping boost Britain’s export potential. There is a significant amount of investment going in to the British spirits industry and the Chancellors welcome boost is likely to see this trend continue into 2018 – as well as broadening out into new variations of English and Welsh whisky.”


UK distillery openings have gone up 172% from 116 since 2010 when the WSTA first started collecting the data – adding 199 in just 7 years.


The region showing the most rapid growth is England which in 2010 had only 23 distilleries and which grew to 135 in 2017, accounting for 56% of all UK openings in the last eight years. London alone now has 24 making it the UK’s gin capital.


While gin has been the main driver over the past 5 years, English and welsh whisky is also contributing to the boom.


James Wright, Managing Director of Aber Falls Distillery which will begin operating this year, said:


“It is an exciting time for the UK spirits industry as people are showing more and more interest in trying new spirit drinks and learning about where these drinks come from and how they are made. Our new site in Abergwyngregyn includes a visitor centre and training centre where the public will be able to sign up for our courses in craft distilling. We are extremely pleased to be creating a new distillery in Wales which will bring jobs and trade to the local area.”


2017 saw yet another bumper sales quarter for the quintessentially British spirit, according to the Wine and Spirit Trade Association’s latest market report.
Brits have bought over 47 million bottles of gin, a record breaking equivalent of 1.32 billion G&T’s, in the last recorded 12 months. This is up 7 million bottles compared to the same period a year ago. 

At the same time, a YouGov poll found gin is the most popular spirit with 29% of drinkers voting it their favourite spirit tipple.


The gin industry across the on and off trade in the UK in 2011 was worth £630m. since then it has nearly doubled to £1.2bn in the 12 months to September 2017, with gin in the on trade alone worth nearly £730m in yearly sales.


The WSTA market report, released last month, shows the equivalent of over 8.8 million bottles of gin were sold in our pubs, bars and restaurants worth £729 million in the same 12 months.


But the majority of the gin sold in the UK is from our shops and supermarkets where 38.7 million bottles flew off the shelves between September 2016 – 2017.


British Gin sales abroad have also seen a meteoric rise in UK food and drink exports with sales now worth more than beef and cereals.


The UK hit its largest ever gin exports in 2016 worth £474m making it the world’s 7th most valuable food and drink export, and growth won’t stop there – the IWSR Forecast Report projects that gin is expected to grow by a further, astonishing 37.2% by 2021.


In the 2017 International Wine & Spirits Competition (IWSC) UK gins received 124 medals. Five of which were Gold Outstanding awards and 12 Gold.


To find out more about the rise in UK distilleries go to the WSTA blog written by Head of Research and Insights, Ciaran Myles.

 

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