There is an imminent date that many are waiting for, each for different
reasons, and which states, saved the case of further extensions, the United
Kingdom's exit from the European Union. The date is set for October 31st,
therefore in less than a month, in which will happen the complex process
that takes the name of Brexit, the famous portmanteau of the English
words Britain – better said, Great Britain – and exit.
An event that, a well-known fact, will have consequences in many areas of
social and political life in both the United Kingdom and the European Union.
Added to these are, inevitably and no less important, consequences in the
economic areas as well, since it is necessary to redefine the commercial
relationships with a direct and, at the moment, indefinable impact for all the
subjects carrying out import and export operations with the United Kingdom.
The consequences of the brexit, in any case, will affect in a decidedly
important way also the agricultural and food industries of all European
countries, including the wineries producing wine – and in particular – the
Italian ones. Italy is clearly not the only European country whose agricultural
and food industries, including wine production, represent a very important part
of the economic balance, however it is known that many of these, including
wineries, export large quantities and volumes of products and wine to the
United Kingdom. This seems to be quite an important problem, in fact, for many
Italian wineries, as well as for those in other European countries, as the
profit share deriving from the export of wine and alcoholic beverages to the
United Kingdom is a very important part. Not least, it represents a very
important profit even for entire areas, denominations and styles of wine, in
particular Prosecco, which bubbles are very popular and loved in the United
Kingdom.
Brexit, which still does not seem to have taken any official form in terms of
both conclusion and definition of commercial and political relations with
European Union countries, is indeed worrying – in any case – for many wine
producers in Italy. In fact, whether it will be adopted the so-called
soft brexit – that is with a reciprocal agreement – or the hard
brexit, also known as no-deal brexit – that is with no agreement –
the economic consequences will have an important impact on both sides. As far
as we are concerned, as Italian and European citizens, it will certainly be
more difficult to export our products to the United Kingdom. In fact, the
possible definition of more complex and less easy trade and exchange rules
– which could very probably see the introduction of customs duties – sales
prices in the UK market will increase with a consequent decrease in volumes.
Confagricoltura (one of the main Italian farmer associations) provided a
measure of the economic impact for wine trading, focusing on the fact the
United Kingdom is currently importing agricultural and food products for about
40 billion euros each year from European Union member countries. As for wine
industry, Confagricoltura reminds that 55% of the wines consumed in the United
Kingdom are imported from European Union countries. Also in the United Kingdom
have been made estimates of the impact of Brexit, in particular the
consequences this will have on the importation of wine and spirits. According
to an analysis conducted by the Wine and Spirits Trade Association
– the British association for the trade of wines and spirits – consumer
prices of these products are inevitably destined to increase and in a decidedly
important way. A measure that, obviously, is a direct consequence of the
introduction of specific duties as well as of higher costs for importation.
Confagricoltura also informs that the cost of customs duties has been estimated
at about seventy million pounds a year, a figure that will be borne by
consumers and will inevitably lead to the loss of competitiveness of imported
products. An expectation that evidently worries the operators of the United
Kingdom, who are trying to make appropriate stocks of products by buying them
according to the current European commercial rules, in view of the unavoidable
increase of prices. The wine industry alone – according to Confagricoltura –
has seen an increase of orders by 20% compared to past years: a figure clearly
providing a measure of how the effects of Brexit are perceived by the operators
of the Kingdom sector. A figure that, in all likelihood, will not record the
same result in the next months, especially in the case the so-called hard
Brexit will happen and which would lead to a stop, certainly temporary, of
trading and until it will be established new agreements.
The agricultural, food and wine industries in Italy are showing concerns also
regarding the consequences of the increase of the prices for the Italian
products. It is very likely, in fact, the increase in sales prices in the
United Kingdom may lead to the replacement of similar and less expensive
products from other countries. Another hypothesis could be the introduction of
counterfeit or lower quality products – therefore sold at a more affordable
price – and identified with names similar to the original ones. In other
words, this could lead to favorable conditions for the marketing of fake
made in Italy products with severe damage to the image and excellence of
Italian production. According to some statements issued by some institutions of
the United Kingdom, no duties are expected for the importation of Italian
wines, however it should be noted that, at this moment of uncertainty, all
forecasts and statements could be denied by the new agreements. In any case, it
is difficult to imagine the United Kingdom will deprive itself of agricultural,
food and wine products from the countries of the European Union, especially
considering the long tradition of importation and appreciation. This would
represent, at least, a drastic and radical change for many well-established
habits, therefore it is foreseeable – as well as desirable – to define
favorable and profitable agreements for both parties in order to avoid even
worse consequences.
Antonello Biancalana
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