SB Voices: What does the Brexit white paper mean for spirits?

13th July, 2018 by Amy Hopkins

If one certainty has come from the publication of Downing Street’s Brexit white paper, it’s that uncertainty continues to pervade the UK’s impending departure from the EU.

Brexit

The Brexit white paper still leaves many questions unanswered for spirits

Turbulence in the UK Government came to a head last week with the shock resignations of David Davis, Brexit secretary, and Boris Johnson, foreign secretary and face of the maligned Leave campaign. While Davis said prime minister Theresa May’s proposed Brexit policy would make “supposed control by parliament illusory rather than real”, Johnson said the proposals were akin to “sending our vanguard into battle with the white flags fluttering above them”.

Prime minister May’s proposed policy, which was outlined during a Cabinet meeting at her Chequers estate earlier this month, has now been solidified and expanded on in a Brexit white paper, titled The Future Relationship Between the United Kingdom and the European UnionThe prime minister said it delivered “a principled and practical Brexit that is in our national interest, and the UK’s and the EU’s mutual interest”.

However, many others have echoed the concerns of Davis and Johnson of a perceived “soft Brexit” – US president Donald Trump even said it would “probably kill” a trade deal with his country.

The document is sizeable, and requires careful digestion, but there are some headline points that can be gleaned by the spirits industry. Whether the sector has a broadly positive or negative reaction remains to be seen, and I am sure views will be expressed in the coming days.

There are key elements that will impact all UK and EU industries with a focus on exports – such as the establishment of a “common rule-book” for the free-trade of goods, including agri-food. Commentators have suggested this will create a remarkably similar relationship between the EU and UK as that in the single market for goods.

The paper states: “In designing the new trading relationship, the UK and the EU should therefore focus on ensuring continued frictionless access at the border to each other’s markets for goods.”

In the words of Ed Conway, economics editor for Sky News: “In short, the idea is to stay in the single market for goods, but not services.”

With regards to customs, the UK Government wants to implement a new relationship with the EU in the form of the Facilitated Customs Agreement, which would “remove the need for customs checks and controls between the UK and the EU as if they were a combined customs territory”. This would allow the UK to control its tariffs for trade with the rest of the world, while also collecting tariffs on the behalf of the EU.

Another key point of the white paper is the government’s reiterated ambition to “avoid a hard border between Northern Ireland and Ireland”. Prime minister May has also promised to maintain a frictionless border between Northern Ireland and the rest of the UK. Irish spirits producers have previously expressed concern about how cross-border supply chains could be hit by a hard border. It remains unclear what that future holds for all-island GIs for Irish whiskey and Irish cream liqueurs when one part of the island will be in the EU and the other outside of it.

The white paper also made clear that the free movement of people between the UK and EU will end. This of course has implications for all companies and sectors that rely on foreign workers. But for our industry, concern has already been expressed over the impact this could have on the on-trade. Many bartenders, waiters and other hospitality professionals are skilled individuals who hail from across Europe.

The Brexit dossier does, however, state that there could be a “reciprocal” agreement with the EU that would allow skilled workers to come into the UK to do “paid work in limited and clearly defined circumstances” without visas. Nevertheless, there remains a risk that new talent coming into the nation could in some way be obstructed, whether they are given preferential access or not.

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