Victoria University’s Glenn Wittwer has published a study on Brexit and how it might harm the UK and global wine markets. In an interview with Sputnik, he explains what the future might hold for those in favor of a glass of tipple.
Sputnik: What inspired you to publish a paper on the impacts of Brexit on the UK and Global Wine markets, from all the way "down-under"?
Glenn Wittwer: Britain is a very interesting market because Britain is a large consumer of wine, but only a small producer of wine. In terms of global trade, any changes in policy that effect Britain will have ramifications for the global wine market.
So Australia has lost its position a little bit in the British market, and at the same time, for all wine producers, China has become more important.
This is because of China's income growth; their discretionary income has increased with their ongoing economic boom over the past thirty years. More people have turned to wine, they are getting western tastes for wine, and China has become a very large wine market. They produce a lot themselves, and now they are rapidly turning towards the world's largest importer of wine.
Sputnik: Do you think that because of an increase in Income Tax, will we see an increase in the production of British wines?
Glenn Wittwer: I think that there is a gradual increase in wine-making in Britain. The weaker pound makes British wines cheaper in the rest of the world, but that includes Britain, making British wine cheaper than imported wine relatively speaking. We are talking about the 15% depreciation in the imports, due to the exchange rate movement.
But perhaps the biggest thing about British wine is possibly the expectation that the climate is getting warmer. Britain's wine-making capacity is very small, and it will always rely on imports to satisfy domestic demand. That doesn't mean to say that the British share in total consumption may not increase.
Sputnik: What is the worst possible outcome for wine-drinkers after Brexit?
Glenn Wittwer: On top of the 15% depreciation, which doesn't seem to have moved that much, the worst thing is that British incomes fall, relative to a No-Brexit, and the reason they might fall is because of a potential shrinkage in the finance industry. London is no longer regarded as one of the financial centers of the world.
Sputnik: But when people have lower incomes, and when livelihoods are under stress, wouldn't people be tempted to drink more?
Glenn Wittwer: One thing that has happened in Britain over the past twenty years is that wines share of total alcohol consumption has increased. Now, whether that share would change again with a bad economic scenario, I'm not entirely sure. Let's say taste change, which I think is a little hard to predict. The other possibility is of course that instead of drinking the fine wine, the British public turn more towards low quality- but I don't think that's going to happen. I think globally the whole world is moving towards drinking less, but drinking better. I don't think that Brexit would raise alcohol consumption, I don't see that happening.
The views and opinions expressed by Glenn Wittwer are those of the speaker do not necessarily reflect those of Sputnik.
The views and opinions expressed in the article do not necessarily reflect those of Sputnik.