Brexit, “we need a regulatory trade parachute”. The appeal to the EU of Unione Italiana Vini

The pandemic is not enough to weigh on the wine market, with Italian exports down 4.2% in the first half of 2020 compared to 2019, as indicated by Istat data reported yesterday by WineNews, there are still political and economic issues to be resolved that further complicate the future. Among these, undoubtedly, the concretization of Brexit, which primarily involves the British market, the most important for Italian wine after the USA and Germany. And the Unione Italiana Vini (UIV), led by Ernesto Abbona, is raising the level of vigilance for what is happening across the Channel in these hours: “there was nothing concrete in the last round of negotiations on Brexit, which is a cause for great concern for the future of Italian wine in a market that is fundamental for our export. With a “no deal” we risk, in the best case scenario, a bureaucratic babel without precedent in trade; in the worst case, different rules for labeling until the adoption of possible duties. For this reason we appeal to the European Union to provide a transitional “regulatory parachute” to maintain the status quo in trade for a period of 12-18 months, given the impossibility of a regulatory adjustment in such a short time”, said Abbona.
“Uncertainty about the rules to be adopted in a very short time is generating very strong concerns among wine companies in a market that represents the third outlet in the world for our export and that is already paying a very high price for Covid-19. In the first half of 2020, according to the ISTAT data released yesterday and processed by our Observatory - underlines the Secretary General UIV, Paolo Castelletti - the drop in value exports of Made in Italy wine in Great Britain was almost 10% in the same period of 2019, with sparkling wines at -19.8%”. In the period also the average price fell, for a value of exports that crossed the Channel has reached 310 million euros. In 2019 the United Kingdom - the second importing country in the world after the USA - purchased wine from abroad for almost 4 billion euros in total.
According to the Wsta, which represents the wine market in the UK, to date the wine product from Europe is not subject to laboratory tests and controls for the wine export certificate (VI-1) provided for third countries - 55% of wine consumed in the UK is imported from the EU - but all certification rules will change, with or without an agreement, from January 1, 2021, when all wine imported from Europe will be subject to these controls. It is expected that the resulting increase in bureaucracy will generate more than 600,000 paper documents - a triple increase for wine inspectors - and will cost the British wine trade an extra £70 million a year, resulting in higher wine prices and a fall in consumer choice.
All this, as said, in an already difficult picture, as it emerges from the same Istat data processed also by the UIV Observatory. Italy, like most wine-producing countries, is experiencing a drop in exports in June. In fact, from January to June, the balance in volume marks -2.1%, at 10 million hectoliters, for a value dropped by 4.2% to 2.9 billion euros. Since 2010, it is the first time that the value of shipments has recorded a negative sign in the first half of the year, accompanied for now by a less drastic filing of price lists, down by 2% on average. To suffer is precisely the value component, which affects both sparkling wines (-8%) and still wines (-3%), in particular those transported on the Horeca sector, which has suffered in recent months the lockdown decided by the various countries.
If Spain and especially France add to Covid-19 the problems in America (tariffs) and China, Italy - less exposed on the Chinese market and for now graced by the application of new taxes in the USA - is only suffering the effects of the pandemic on consumption, which are resulting in the penalty of wines destined for the catering industry partly compensated by the increase in the number of products more present on the large distribution circuit, with the effect of “insecurity” that pushes the consumer to search for wines and brands already known, to the detriment of the desire for new or special.
Here are explained - according to the Observatory - the heavy impacts for PDO reds, in particular from Tuscany and Piedmont, which are also down on the volume component (-7%), while for now the denomination whites compensate on the value with the increase in volume supplies (+5%), driven by the good performance of the “reassuring” Pinot Grigio in the USA and UK. A similar trend for sparkling wines, where if Prosecco contains losses in value at -4% (with decreases both in the US and UK), PDOs - so classic and similar methods - go below even 40%. In contrast to the positive trend, sparkling wines (+5% in volume and +2% in value), which are confirmed as a domestic and everyday product, therefore free from the vicissitudes of the Horeca channel.