The EU Centre for Global Affairs Annual Grant Program recipient Professor Kym Anderson AC is George Gollin Professor of Economics and Executive Director of the Wine Economics Research Centre, University of Adelaide and Professor of Economics, Crawford School of Public Policy, Australian National University, Canberra.
Professor Anderson recently gave a seminar at Chatham House, UK on “Global Wine Markets and Brexit” and presented a Briefing Paper “Will Brexit Harm UK and Global Wine Markets?”. Some key points from Professor Anderson’s model:
- For wine markets, the impact of the UK leaving the Customs Union is likely to come not only from tariff
changes but also from slowed growth of UK incomes and devaluation of the pound.
- Even if the UK were to sign new trade agreements with the EU27 and others, the time it would take to
implement them and for markets to adjust ensures that the likely effects of Brexit on wine markets will be
adverse over the next few years.
- In the main scenario considered, for consumers in the UK the price of wine in 2025 is 22% higher in local
currency terms than it would be without Brexit, the volume of UK wine consumption is 28% lower, and the
value of UK imports is 27% lower because of Brexit.
- Such a sales reduction in the UK would be a blow to participants in UK wine bottling, transporting, storing,
wholesaling and retailing businesses, as well as restaurants and pubs.
- Because the UK is a key player in global wine trade, accounting for a major share of the world’s wine imports,
Brexit will also affect wine-exporting countries, with few if any gaining in the main scenario considered over
the modelled projection period to 2025.
The seminar and the Briefing Paper attracted news coverage by London’s Financial Times. Download a copy of the article “A sobering effect on wine” HERE.
Professor Anderson and Professor Glyn Wittwer, Victoria University, Melbourne are developing the subject of Brexit and Global Wine Markets further and at the moment have produced a series of Wine Economics Research Centre Wine Briefs on “Will Brexit harm UK and global wine markets?”, “How will Brexit affect Australia’s wine exports?” and “Impact of a ‘softer’ Brexit on wine” and a Working Paper on “The UK and Global Wine Markets by 2025, and Implications of Brexit”.