The price of wine in the UK could be set to increase by more than 20 percent as a result of Brexit, a new academic paper reveals.
In a paper published by the Journal of Wine Economics entitled “the UK and Global Wine Markets by 2025, and Implications of Brexit”, researchers anticipated the effect that leaving the EU could have for wine lovers.
The paper explored a hypothetical “large” Brexit scenario which envisaged a harder exit from the EU. It found that a hard Brexit could increase the consumer price of wine in the UK by 22 percent by 2025.
Researchers argued that there are several factors that would contribute to the hike in price.
They said that prices would rise “20 percent because of real depreciation of the British pound; 4 percent because of new tariffs on E.U., Chilean, and South African wines; and –2 percent because of slower U.K. income growth.”
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Brits will be less inclined to buy wine as prices rise, the researchers anticipated, they claimed that 28 percent less wine will be drunk.
“The volume of U.K. wine consumption is 28 percent lower: 16 percent because of slower U.K. economic growth, 7 per cent because of real depreciation of the British pound, and 5 per cent because of new tariffs,” the paper said.
“Superpremium still-wine sales are the most affected, dropping by two fifths, while sparkling and commercial-premium wines drop a bit less than one quarter,” researchers wrote.
The consumption of domestic wine is also set to fall due to the “shrunken demand for all wines resulting from lowered UK incomes and raised local prices because of devaluation of the British pound”.
In the UK there is already some evidence that Brexit has affected the price of wine.
Earlier this year the data from the Wine and Spirit Trade Association reported that the cost of a bottle of wine in the UK had hit a record high over the summer.
