Post-Brexit wine woes?

I’m writing this on the 1st February, 2020, the day that the UK cut loose from the European Community, to sail a different, as yet uncertain course. Good luck to her, and all who sail in her!

Ok, colours to the mast time – I’m firmly pro-Remain, and continue to be so, now that all seems lost to many of us, believing, and hoping, that one day, perhaps in my lifetime, the UK will re-join the EU. However, I have friends who argue from the opposite side of the great Brexit divide. We disagree, but that doesn’t alter our friendships. ‘Discuss’ is a better word than ‘argue’!

So, in the spirit (that’s a better word – I need a strong drink!) of impartiality, I’d like readers this week to please put aside differences in ideology and consider the current difficulties of European winemakers, in general, and, of course, specifically those of Spain.

My tasting a Rioja Gran Reserva (Prado Enea, Bodegas Muga, if you are interested!) for the first time (there have been several subsequent occasions – it’s a wonderful wine!) many years ago wasn’t the main reason, but it certainly was a contributing factor to my eventual relocation to Spain. My thoughts were – if the Spanish make wine this good, I need to be closer! So, clearly I have a certain affinity with the Spanish wine sector – and of course, after 23 years of residence here, many friends in the business. Frankly, my heart bleeds for them!

I’ll come back to leaving the EU in a few paragraphs – you see there are other actual (rather than possible, re Europe, as we don’t really know yet what it’s going to be like) severe trading difficulties to consider as well. I was listening to the radio yesterday (31st Jan – that momentous day!) when I was delighted to hear my friend and wine colleague Pancho Campo being interviewed. Well, I say, ‘colleague’, but that certainly doesn’t mean I put myself at the same level, wine wise, as Pancho!

A Master of Wine (one of only about 340 MWs in the world at the time), Pancho Campo resigned from the Institute of Masters of Wine, to go on to many other different prestigious activities, one of which put him on friendly terms with the Obamas! Pancho is certainly well connected! And that includes with the wine world generally, as well as that of Spain, where he also lives, though travelling a lot.

Pancho was talking of a Spanish winemaker friend of his, who, after years of paper chasing and resulting sweat and tears, had finally broken into the notoriously difficult USA market to sell his wine. A container was loaded, full to the brim with his wines and ready to ship Stateside – until, at the last moment, the order was cancelled! The reason - President Trump’s 25% extra tariff on wine and foodstuff from Europe! A serious setback, perhaps disaster, to the friend in question – and of course, he isn’t the only one.

The USA is an extremely important market for Spanish wine, in fact ever since Miguel Torres packed lots of sample bottles and went knocking on doors decades ago, before any trade existed between the two countries! Those currently established in the market, will be very worried. Those hoping to enter, will probably have to give up! Even though Spanish wines offer amazing value for money, 25% just isn’t possible to absorb!

Another still developing, though already well established market, is that of Asia, specifically China! And of course we all know about the dreadful virus that is basically closing China to any further visits from prospective Spanish wine traders, and reciprocal visits to Spanish wine fairs, as well as restricting further growth in such an important sector.

Then, Brexit happens! But what does it all mean?

Well, as alluded to above, nobody really knows. There are a number of possible scenarios (oops, sorry, is that a European word?!), some of which were articulated by my wine friend, Andrew Halliwell. Prior to today, trade between Spain and the UK has been straightforward, easy. The general consensus seems to be that whatever happens, the change won’t make it any easier!

So that’s a possible/probable worry for Spanish (and all European producers), as it is likely that there will be more paperwork and more queues – the likelihood therefore is that smaller producers won’t make the necessary extra effort, as they have limited resources, certainly in terms of time! Plus, the cost of importing Spanish wines may increase. So, there is likely to be less choice of Spanish wines on UK shelves.

There are also possible problems re the exchange rate – a weakened pound will make Spanish wines more expensive, and the uncertainty is likely to weaken the pound, at least for a certain time. Of course, against that it may mean that wines from other non-European countries become more prevalent on the shelves as their produce might be more economically attractive. So an opportunity for the British to experience more easily, and less expensively, wines from different parts of the world. But, once established/ further established, indeed, ingrained, in the British consumer buying psyche, as time goes on, it will be difficult to find future demand for Spanish wines in the UK.

There may also be a boost in sales of British wines in the UK – well that’s good for this nascent industry, but it will be to the cost of our European, and of course, Spanish friends. Yep, difficult times right now for the Spanish wine industry – please spare them a thought!