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Why the Question Time wine merchant who shocked Rees-Mogg was right about the Brexit damage to his industry

Leaving the EU has left the wine import/export business with a shocking hangover

Photo: Aaron Chown/PA Wire/PA Images

In the cheesiest scene of that cheesiest of Christmas staples, Love Actually, tormented soul Mark finally expresses his unrequited love for Juliet by silently holding up cue cards on her doorstep and fessing up to his feelings “just because it’s Christmas – (and at Christmas, you tell the truth)”.

Perhaps Jacob Rees-Mogg – jack of three trades in 2022 (leader of the House of Commons, minister of Brexit Opportunities and business secretary) and master of none – felt a bit like Keira Knightley’s slightly vacant-faced Juliet when an irate wine merchant delivered his own version of Christmas truth during Question Time this week. 

John Hearn, who worked in the industry for 30 years and described himself as a “life-long Conservative voter”, eschewed the cue cards and carols as he laid bare how “terrible things have become post-Brexit”, decrying crippling paperwork and bureaucracy that is suffocating the trade.

“Everything has become so much more complicated and the whole point about this (Brexit) being oven-ready … It’s about as oven-ready as a frozen turkey taken out five minutes before Christmas day. It really is a joke and I think it’s time that someone starts being honest. None of the political parties are actually talking about Brexit and its one of the most fundamental problems we’ve got,” Hearn said, as Rees-Mogg channelled his inner Juliet. 

When Rees-Mogg tried to interject that post-Brexit free trade deals with Australia and New Zealand – deals now discredited by the man who negotiated them – were a boon to the industry, Hearn was having none of it, 

“We are one of the most important countries from an export point of view, second only to the United States, for wine buyers and producers … and every single one of the people I speak to outside the UK finds it incredibly difficult now to ship wine into the UK. We’ve taken away one of the biggest success stories we’ve got,” he insisted, leaving Rees-Mogg to fall back on the trite declaration that Brexit was a “huge deregulatory opportunity” and yes, ok, the government should do more to make it easier to import. Promises, promises. 

Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA), backed Hearn’s analysis.

“If you are involved in importing or exporting wines and spirits, or probably any other drink and most other foods, between the UK and the EU, it’s now more complicated than it was … We are trying to create a business and commercial environment for our members where there is as little friction as possible and it is unquestionably true that there is a lot of friction,” he said. 

That’s also true across the board for businesses trying to trade internationally. Marco Forgione, director general of the Institute of Export and International Trade, said their research over the last two years showed the number of businesses trading internationally was declining. “Some of that is undoubtedly because of the macroeconomic effect of Covid and the global logistics meltdown but undoubtedly Brexit has had an impact,” he said. 

Beale noted that the government had done well to take WSTA advice and get rid of VI-1s, a kind of import certificate that used to be required in the UK, as for all EU wine imports, pre-Brexit. However, in other areas, decisions have not been made or the wrong decisions have been taken, while the impasse over trading conditions in Northern Ireland is also hobbling the industry, notably because of a row over labelling.

Beale believes there is an easy solution whereby wine labels would list an EU importer and a UK food business operator.

“Then you can have exactly the same label for the same bottle of wine whether it’s on the UK market or the EU one. And that would be a solution that puts our members almost in the same place as they were before Brexit. There is no way that is objectionable but there is also no way it will be agreed until the EU and UK get back round a table and start talking constructively again,” he said.

He noted that Rees-Mogg was correct in saying that tariffs had gone down for wine from Australia and New Zealand but added that that was not the whole story.

“We think getting rid of the tariffs on imported Australian wine benefits wine traders by about £22 million pounds a year to the economy but that is counteracted by what the UK government wants to do with a new duty system where they want to tax alcohol according to strength. An additional £92 million per year, almost five times as much, under the new alcohol duty regime – simply because Australia’s climate is hotter than any other wine-producing region and that is what makes their grapes produce wine of a higher alcohol content,” Beale said, citing this as an example of the government’s “unjoined up” position.

“The government is missing opportunities, especially to encourage economic growth. We think the UK has rescued defeat from the jaws of victory – if that’s how they think about Brexit. The other way around would be to say it wasn’t worth doing. If you are going to replace one system of taxing alcohol – as you can do after leaving the EU – why introduce something much worse and much more expensive for businesses and consumers as well?”

Beale said smaller companies were bearing the brunt of this government incoherence, as they would struggle more to meet the new red tape and paperwork requirements, and their desire to find new markets would be blunted. This could jeopardize the whole sector’s potential.

“We can’t realise that potential because we can’t encourage small businesses to do things like export in the current climate. There is a huge irony … If you wanted a Global Britain, our sector really could be an example in 10 or 20 years’ time, but we are certainly not going to get there the way things are going at the moment … There is a lack of ambition that is really sad.”

Forgione, whose organisation has offered £2m of free training to support UK businesses through Brexit, said a lack of clarity from the government was exacerbating the problems. 

“The issue for businesses is to make sure they have the skills, knowledge and expertise to comply with the new rules and regulations … Businesses are frustrated because new rules and regulations are being touted and just as you approach the deadline, the can gets kicked,” he said, citing the example of a webinar his Institute ran to prepare wine businesses for new labelling due to come in in January next year. “They cancelled that, but by that time businesses had invested tens of thousands of pounds for new labelling that now is not required,” he said. 

Just like Love Actually’s smitten-kitten Mark, Hearn was undoubtedly aware that he was speaking “without hope or agenda”, given the apparent inability of the UK’s main political forces – both Tory and Labour – to admit the true scale of the damage being caused by Brexit. But outside Westminster the silence is fracturing. 

On Twitter, British wine wholesaler Daniel Lambert, who moved to Montpellier, France earlier this year and set up a French company to export back to his own company in Wales because of the costs and red tape associated with Brexit, didn’t mince his words. 

“This is about as clear as the wine trade can make it. @brexit is destroying the UK wine industry and bearing in mind the UK was the main international hub pre Brexit the pathetic reply from 

@Jacob_Rees_Mogg demonstrates just how out of touch he is.”

Lambert, who imports up to 2m bottles of wine a year for 300 retailers including supermarkets, told the Guardian last year that he was unable to import wine from the EU because of the complex HM Revenue and Customs system, which requires companies to work out one of 10,000 different combinations to describe the product they want to import. 

In a detailed Twitter thread after the Question Time broadcast, Lambert said that pre-Brexit there was just one document to fill in to import wine but now there are five, “which all require specialist brokers or trained people to complete”. You also need a dizzying array of accompanying documents, mostly from the customs service. 

Lambert said the government knew Brexit was killing the economy but could do nothing but lie. 

“So hopefully the electorate will force change back in the right direction. Moreover when you see your wine has increased by £2-£4 per bottle you can thank Brexit and the government for making importing so much more difficult whilst incurring unnecessary costs the public pays,” he tweeted.

It’s not just wine. A study published by the London School of Economics in December found that leaving the EU had added an average of £210 to household food bills over the two years to the end of 2021, costing UK consumers a total of £5.8 billion, and hitting the poorest households, which spend a greater share of their income on food, hardest. 

Not to mention the lost investment, drop in trade, and slower growth caused by the decision to leave the EU. An October report from the Economic and Social Research Institute (ESRI), an Irish think tank, said trade from the UK to the EU was down 16% on the levels anticipated had Brexit not happened. Trade from the EU to the UK fell by 20% compared to what you might have expected if Brexit had not happened.

The numbers don’t lie, even if Brexiteers like Rees-Mogg can do nothing else. Only 20% of people now think the government is handling Brexit well, while 67% say it is handling it badly. It’s a truth that even Brexomertà can only bury for so long. 

In the end, Hearn spoke for much of British industry when he concluded starkly: “It was better before, Jacob. You’ve taken something that was working and you’re making it not work.”

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