The Wine & Spirit Trade Association (WSTA) warned earlier this week that wine prices could rise by up to 29p per bottle and urged the Government to come out in support of the trade.
With the Treasury's Autumn Statement weeks away, WSTA chief executive Miles Beale said: “Any increase on duty, on top of the post-Brexit sterling devaluation, would have dire consequences on Britain’s wine trade.”
The value of the pound has dropped by 15% since the decision to leave the EU was made on 23 June, which the WSTA claims could see the cost of importing wine from Europe rise by £225m per year and the price of importing wine from outside the continent rise by £188m.
'Hold off' on price hike
Paul Berry, owner of Devon freehouse the Swan, Bampton, Derbyshire, told The Morning Advertiser (MA): “We will try and hold off on raising prices. I’ve spoken to one supplier who’s said the same.
“I feel that for us, particularly being in a more rural area of Devon, that we have to be a little price cautious. We charge £5 a glass for Prosecco at the moment, which I think is pretty good value. And [raising prices] is difficult because customers do notice.”
Berry continued: “You can’t explain these things to people – they won’t understand. It’s like when the budget comes and you get the usual round of increases. You end up putting 5p or 10p on a pint because, effectively, that’s what it has cost you.”
However, he suggested the situation may not turn out so badly if the weak pound led to a sharp increase in tourism.
“I can envision more tourists coming on holiday to England because of the pound so, hopefully, if our trade increases a bit, we won’t have to pass on too many of the price rises from Brexit,” he said, adding: “I’m quite happy to have more customers, make a lesser margin, but still make the profit.”
Not as dire
But Heath Ball, owner of the Red Lion & Sun, Highgate, north London, which was named Best Wine Pub at this year’s Great British Pub Awards , told The MA the situation may not be as dire as it was being made out to be – for licensees at least.
He said: “I’m lucky – we’re a bit more bulletproof here – everybody is working on percentages but I’m working on cash margin.”
“Remember, we’ve had stable pricing for three years. If prices rise, unfortunately, the only person who's going to suffer is the punter. Everything is getting more expensive – the food, this is the backlash of Brexit. It's brutal.”
Adam Porter, head of buying and marketing at supplier Jascots, told The MA price rises could particularly effect regions that were already in a more 'premium' price category.
He said: "The rise in prices of any EU wines will change the competitive landscape and particularly impact some classic regions.
"Last year we observed the increasing trend of native Spanish and Italian grape varieties such as Garnacha, Godello, Fiano, Falanghina and Nero d’Avola that over-deliver quality and value in addition to providing an interesting alternative to consumers in the On-Trade.
"Further price pressure will make those even more relevant in the coming year.”
It's not just wine prices that will be affected by Brexit. Gin buyers could face serious price hikes if the Government raises duty in accordance with inflation in the Autumn Statement.