05:14 GMT +322 September 2019
Listen Live
    Wine

    What are You Whining About? There'll Still be Wine After Brexit

    © Photo : Pixabay
    Opinion
    Get short URL
    0 10
    Subscribe

    A British winemaker has started making sparkling wine in pint-sized bottles, preparing for a post-Brexit future, wherein the imperial measure celebrated by Winston Churchill could make its return.

    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. 

    Australia is not as big in Britain as it used to be. I think the value of exports in Britain over the past decade has halved. There are several reasons for that; one is that the Australian Dollar went way up during the mining boom, which started about a decade ago. That means Australia lost competitiveness, and meanwhile, the British consumers discovered Argentine Malbec, and decided that that was the new red to have, and Australian wines became a little less loved.

    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.

    READ MORE: Economist Predicts China Poised to Take Lead in French Wine Production

    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.

    READ MORE: Hitting the Bottle: Wine Prices 'Will Have to Rise' as Frost, Fire Reduce Supply

    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.

    This is an extreme idea, and not the one I necessarily think is going to happen. But if that were the case in addition to having a weaker pound, income losses would reduce spending power within Britain further, and mean that consumption on all household items, including wine, would fall. I think a more likely scenario is that ongoing negotiations between Britain and the EU will result in a softer Brexit, so that the pound moves back closer to where it was before the announcement of Brexit, and incomes fall by less than they would have otherwise. 

    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.

    Related:

    France's Macron Defends Wine, Says He Drinks It Twice a Day
    Watch Tourists Experience Peculiar 'Wine Waterfall' Rite of Chinese Ethnic Group
    Australia Launches Trade Dispute Against Canada Over Wine Sales
    Tags:
    wine, economy, climate change, Brexit, Australia, China, United Kingdom
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik