In February 2016, UK Prime Minister David Cameron announced that a referendum on whether or not Britain would remain in the European Union will be held on Thursday 23 June 2016. This article discusses what this might mean for Australian wine exports to the United Kingdom should Britain vote to leave the EU (a moved termed the ‘Brexit’); in particular, what the effect might be on import duties, the impact for our competitors, and the wider economic factors to be considered.

The United Kingdom has been a member of the EU since 1973, but public opinion has been varied on the issue of membership ever since and even more so after the Conservative party won the election in 2015 on the back of promising a referendum on the subject. Current opinion polls have ‘leave’ at 43 percent, while ‘remain’ sits at 39 percent. This raises the question of what the world would look like without the UK as part of the European Union.

As a member of the EU, wine imports into the UK are subject to import duties – Common Customs Tariff (CCT) – and EU regulations. The current rates are illustrated in Table 1. Based on Wine Australia analysis of customs data for table wine, it is estimated that the cost of the EU import duty on Australian wine exports to the UK totalled more than A$42 million in 2015.

If the United Kingdom were to leave the European Union, these duties by default would no longer apply and, as such, level the playing field. Our main competitors in the UK market are other states within the EU, namely France, Italy and Spain, and these countries are not currently charged duties. As illustrated in Table 2, it is estimated that, combined, these countries are currently saving approximately A$110 million per annum as a result of their EU membership.

Image Courtesy and full article can be found at source:https://dailywinenews.wordpress.com/2016/06/17/impact-of-the-brexit-on-australian-wine-exports/