Brexit: Reactions from the beverage industry

By Rachel Arthur contact

- Last updated on GMT

Brexit: what's next? Pic: iStock
Brexit: what's next? Pic: iStock

Related tags: Scotch whisky, International trade

Britain has voted to leave the European Union, and the negotiation of new trade agreements will be a key area of focus for the wine and spirits industries.

Scotch Whisky represents a quarter of all UK food and drinks exports, and categories such as gin​ and wine​ have been building their focus on increasing exports in the future.

The wider F&B industry view

Euromonitor says one key word will overshadow the UK economy: uncertainty. And this uncertainty will not just be in the short term, with exit negotiations set to last two years. In the food and beverage industry, confectionery, ready meals and sweet and savory snacks are expected to be the most affected packaged food sectors in the UK.

In March, the results of a poll of members of the UK’s Food and Drink Federation (FDF) showed that 70% of members supported Britain’s membership of the EU. Ian Wright, director general, said that it was therefore inevitable that the majority of members would be disappointed in Britain’s decision to leave.

Brexit stats

  • 51.9% voted to leave
  • 48.1% voted to remain
  • 72% turnout
  • 17.4 million people voted in favor of Brexit
  • Prime Minister David Cameron has resigned

But he added that the FDF will be working on behalf of members to “find a way through this very challenging period.”

“We'll focus on working with the Government to understand what this means for trading, market access and regulation to secure the best outcome for British food and drink manufacturing business and their customers."

Wine and spirits

In the wine and spirits industry, 90% of members of the Wine and Spirit Trade Association had stated that they wanted to stay in the EU​ (according to a poll of members that was announced in March).

The industry made £1.8bn ($2.54bn) in EU exports last year, while also benefiting from arrangements between the EU and other countries.

Following Thursday’s referendum, Miles Beale, chief executive of the WSTA, said the focus must now be on supporting British exports.

“While our members felt that the wine and spirit industry was stronger in the EU, we will work to assist government in preserving our access to the Single Market, supporting British drinks exports and agreeing the best possible international free trade agreements.

“The WSTA will do everything it can to ensure that the UK’s wine and spirit industry has a powerful voice with a view to promoting the great British drinks industry’s leading position and fulfilling its huge potential in an increasingly competitive international marketplace.”

Scotch whisky: Importance of exports

Future trade agreements are also the focus for the Scotch Whisky Association. In fact, Scotch Whisky represents around a quarter of the UK’s food and drink exports, sold in 200 markets worldwide.

The Scotch Whisky Association had previously stated it was important for the UK to remain​ part of the EU.

Speaking after the referendum result last week, David Frost, Scotch Whisky Association chief executive, said: The process of leaving the EU will inevitably generate significant uncertainty. 

"We are confident Scotch Whisky will remain the pre-eminent international spirit drink. But equally, there are serious issues to resolve in areas of major importance to our industry and which require urgent attention, notably the nature of future trade arrangements with both the single market and the wider world.

“The government will now need to consult as it prepares its negotiating approach.  We look forward to working closely with them on that. We urge thoughtful and serious consideration by all parties so that we can secure the best possible continued access to the EU and other export markets on which Scotch Whisky's success has been built, whilst minimizing costs and complexity."

Vineyards within the UK

The United Kington Vineyards Association (UKVA) is a trade body for grape growers and winemakers.

A statement from the United Kingdom Vineyards Association said: We face a new chapter in our nation's history and undoubtedly with that will come changes and opportunities.  The UK wine industry remains excited and optimistic about its future and will support and work alongside the trade bodies and government to ensure we retain a strong voice as we move forward and continue to grow strongly.”

The UKVA’s CEO, Barry Lewis, assured members that the body will be working to provide information as and when it can.

“It is time for our industry to be clear in its approach and work within the framework of the coming negotiations. Many within the industry will be understandably disappointed and others perhaps will be feeling a sense of optimism.

"The important thing is for the time being nothing will change and we shall work with DEFRA [the government’s Department for Environment, Food and Rural Affairs] and others to understand what will eventually change and how we can influence, shape and work within those changes.”

Related topics: Markets

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