Brexit and the IWSC – how will I be affected?

Brexit and the IWSC – how will I be affected?
IWSC News

ven 8 nov 2019

Da Chris Mercer

Brexit may be edging closer but we’ve got you covered with this expert guide to getting your bottles in front of our judges.

Glossary of Brexit terms

As the UK cuts its ties with the European Union, the level of disruption is hard to predict -  but at the IWSC we have ensured that no matter where you’re based, in the EU or outside, the process for entering your wines or spirits will be as seamless as ever.

The UK remains comfortably the world’s second biggest wine importer in both volume and value, according to OIV figures. Consumption has fallen slightly in recent years, but was still 23.4 litres per capita in 2017. That compares to 12.4 litres in the US, for example. Britons’ love affair with wine is unlikely to be dampened by Brexit.

That said, leaving the EU will require the wine trade to adapt to new systems, regulations and ways of working.   

A no-deal Brexit is now more remote in the near term, partly due to the extension period and the general election on 12 December. But it is still possible after the latest deadline extension expires, on 31 January 2020, or if the UK and EU fail to agree terms for a free trade deal after a transition period. 

There has been some reassurance from the wine and spirit trade in recent weeks.

Michael Saunders, CEO of the major UK distributor Bibendum, said that, working with the merchant’s Ireland-based owner, C&C Group, he was confident that the business “will be able to continue to support both our suppliers and customers, irrespective of the political outcome”. 

The Wine & Spirit Trade Association (WSTA) said the government’s decision to suspend extra regulatory paperwork in the event of no deal was ‘a victory for common sense.’


Here is our guide to some of the key issues and advice for entrants to IWSC 2020, which opens on 2 December.

How easy will it be to send wine to the IWSC after Brexit?

If the UK leaves with a deal then EU rules will still apply as normal during a transition period, which could be extended if both sides need more time to agree a future trade deal.

Brexit won’t affect the process at IWSC, which will still offer consolidated shipping for a one-off fee, excluding VAT, via Hellmann Worldwide Logistics. Entrants will also be able to submit wines and spirits in person to IWSC teams at major trade shows, including Prowein and Wine Paris.  

If there’s a no-deal Brexit and you want to send EU wines or spirits independently after this date, then we will publish new and more detailed guidelines to make the process as simple as possible. Some couriers, such as Fedex, have plans in place for this, while UK importers or agents could consider applying for ‘transitional simplified procedures’ (TSP) to help fast-track goods.

How can I prepare for Brexit?

No-deal may be more remote for now, but it’s worth having plans in place. Even if the UK leaves with a deal and subsequently agrees a free trade deal with the EU, there may still be new customs procedures to follow in future.

You should:

  • Speak to your importer and/or agent to make sure everyone knows their responsibilities for keeping the supply chain moving.
  • Contact your national customs authority or trade body for advice.
  • Plan ahead; don’t leave shipping or entries until the last minute. UK merchants have built up stocks to cover any short-term border issues.
  • Appoint a Brexit ‘champion’ among your staff who will stay up-to-date with the latest customs advice, processes and registrations in the event of no-deal.

European wine trade body the Comité Européen des Entreprises Vins (CEEV) highlighted that if the UK loses access to the European Excise Movement and Control System (EMCS), which tracks the movement of goods across the EU, then exporters and importers will need to make sure they have the relevant customs clearances on both sides of the Channel. 

How will different EU and non-EU countries be affected? 

A no-deal exit would see the UK relying on World Trade Organisation rules. The current UK government said it has made efforts to minimise disruption at ports, for example by placing zero tariffs on wine imports for 12 months and suspending the need for new VI-1 regulatory certificates for nine months.

Trade bodies will be keen to see any new UK government reaffirm those commitments, if no-deal remains an option following the general election in December.

For non-EU countries, a WSTA spokesperson said: “Things shouldn’t change too much for third-country wines coming in to the UK post-Brexit, as the government has confirmed there will be a 12-month temporary tariff rate of zero in the event of no deal. In addition, all of the most important deals for wine imports from third countries have been rolled over.” 

The UK has agreed deals with several countries to mirror current EU trade agreements in the short-term, should they be needed. Chile and South Africa are covered, for example, as are the EEA nations of Norway and Iceland. You can find a full list here.

Mutual Recognition Agreements (MRA) with the US, Australia and New Zealand, which cover labelling and winemaking practices, have also been signed. Discussions with Japan were ongoing at the time of writing.
  

How much more am I going to have to pay to enter my wines to the IWSC? 

Fees are unaffected by Brexit; online entries for IWSC 2020 cost £140 per entry plus VAT, while offline entries cost £160 plus VAT. This is a minimal increase.

You can also send fewer samples in 2020. You must send three samples of a particular wine or saké per entry, versus four previously, and two bottles of spirits or vermouth, versus three previously.  

How much more is it going to cost to send my wines to the UK?

For IWSC, consolidated shipping fees have increased slightly to £53 per entry for wine, saké and vermouth, and to £85 per entry for spirits. 

If you opt for the bottle collection service at trade shows, the cost will be £26 per entry for wine, saké and vermouth. It will be £65 per entry for spirits. These prices include duty but not VAT.

Outside of competitions, it’s hard to say at this stage. Duty and exchange rates will continue to play a central role, though.   

How much more form-filling is there going to be on top of the IWSC form?

IWSC entry forms are not affected by Brexit.

What is a UK Economic Operator Registration and Identification Number (EORI) and how do I get one?

This is a unique, 12-digit ID for companies to use on customs declarations. It’s free to obtain and you can apply online.

Importers will need one issued by the UK government – starting with ‘GB’ – to declare arriving goods. EU exporters won’t automatically need a UK EORI number as well as their European one, according to the British government.

But, both would be needed if an EU exporter was shipping to its own subsidiary in the UK, or the sales contract specifies that the exporter is responsible for all customs declarations.      

An EORI number that starts with ‘GB’ will be needed to apply for HMRC’s ‘transitional simplified procedures’.

What is the difference between sending wines or spirits to the IWSC?

Differing UK duty rates for wines and spirits will still apply as normal. You only need to send two samples per entry for spirits, versus three for wine. It is sometimes possible to submit fewer bottles of particularly expensive spirits.   

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The Brexit Glossary: 10 terms to know

 

Article 50
The part of the EU’s Lisbon Treaty that sets out how a member state might leave the Union. Previous prime minister Theresa May triggered Article 50 for the UK on 29 March 2017.

Transition Period
Put simply, if the UK leaves with a deal then there will be a period during which all EU rules still apply to the UK. Under the currently proposed deal, the transition runs until the end of 2020, with the option of extending it once, for two years. Leaders will try to agree a trade deal before it ends.

No Deal
This essentially means the UK leaving the EU with no agreed transition period. It could also happen if the two sides cannot agree a trade deal by the end of the transition period. 

WTO Rules
In a no-deal situation, UK trade with the EU would default to the basic rules set down by the World Trade Organisation. Some measures have been taken to offset this, as discussed above. 

Tariffs
This is a tax on the import of goods. It’s different from a sales tax, such as VAT, and excise tax, which for alcohol is set by individual EU member states. If there’s a no-deal Brexit, the current UK government has said it will set tariffs on wine imports to zero for 12 months.  

VI-1
This is a paper certificate containing technical information about a wine – from abv to sulphites – that proves a non-EU wine coming into the bloc complies with EU rules. Some ‘third countries’, such as US, Australia and Chile, can submit a shorter version. 

There was concern that the UK might require EU wine imports to carry UK-specific VI-1 papers in a no-deal Brexit, but that is no longer the case after UK officials said they would suspend the need for new VI-1s for nine months in this scenario.

MRA
A mutual recognition agreement is where both parties recognise one another’s assessments of whether a wine or spirit conforms to an agreed set of standards. The idea is to speed things up and the EU has several MRAs, which the UK has been seeking to replicate. 

Customs Union
The UK is currently part of the EU-wide customs union, which sets a ‘common external tariff’ on imports from outside of the bloc and helps goods to move more freely within it. 

EMCS
The ‘excise movement and control system’ is a computer programme that tracks duty suspended goods, such as wines or spirits, as they are moved within the EU. 

Transitional Simplified Procedures (TSP)
Designed to prevent blockages at ports in a no-deal Brexit, importers can apply for this – allowing them to delay full import declarations and duty payments. You’ll need a duty deferment account and an EORI number starting with ‘GB’.

Glossary Sources: Wine & Spirit Trade Association, UK Government, European Commission.