When the Brexit result was announced, the world paused. The value of the British Pound dropped to its lowest level in over 30 years, UK Prime Minister David Cameron resigned and according to the Guardian, the panic caused by Brexit wiped $2 trillion from the value of global markets. But it may have a positive effect on French wine trade, writes Ideal Wine Company.
Brexit and wine
Last week we discussed how Australian wine makers could benefit from Brexit. This week Ideal Wine Company look at the impact Brexit may have on the French wine trade.
It is not yet clear how Brexit will affect the worldwide wine sector. Decanter writes that the UK is the 6th largest wine consuming country on earth, so it is likely that Brexit will re-shape the international wine market in some way, shape or form.
Impacting French wine
Brexit may have a negative impact on the French wine trade with the UK. France is arguably the world’s most famous wine-making country, boasting regions such as Champagne, Burgundy and Bordeaux which are known for consistently producing and exporting fantastic wines. An article from the Financial Times reveals that the UK was France’s largest wine export market (by value) in 2015.
It is not surprising, therefore, that RFI English reports that the falling pound could see the price of French wine increase by as much as 8% in the UK. This could limit UK consumers’ purchasing power, with French wine dealers saying that the effects of Brexit are already being felt across France.
Lot of uncertainty
Commenting on this phenomenon Pablo Huart, the Director of Paris-based wine cellar ‘Le Cercle by Vintage & Cie,’ said: “It’s really recent and we’ve started to see a reaction among wine professionals we work with … there’s lots of uncertainty. Nobody really knows what’s going to happen.”
While many French dealers are rushing to buy cheaper wine from English merchants, export prices are being damaged in France as well. Continuing, he said: “I know many merchants have been avoiding going to the [annual Bordeaux] En Primeur campaign, some properties are having difficulties selling all their wines – in contrast to other years. Already many merchants were buying smaller quantities of Bordeaux wines – and now with the UK leaving Europe, the climate for business is very uncertain.”
It is hard to really determine what effect Brexit will have on France’s wine trade with the UK. However, British consumers have a taste for bottles produced in French regions such as Bordeaux so whatever happens, it is likely that they will keep buying wine from our neighbours across the channel.