The Wine and Spirit Trade Association (WSTA) has warned that the falling value of the pound could see the cost of importing wine rise by £225m a year inside the EU, and an estimated £188m a year for bottles from outside the EU.
The WSTA said that as 99 per cent of the 1.8bn bottles of wine drunk in the UK are imported, the industry was bracing itself for a financial hit.
“We should be under no illusions that wine prices are likely to increase, which in the current climate could lead to a bottle of wine going up by 29p," said Miles Beale, chief executive of the WSTA.
“This is of grave concern to the wine industry and it is vital that Government come out in support of the trade which generates £17.3bn in economic activity.”
He warned that any increases in wine duty in the upcoming Autumn Statement could have ‘dire consequences’ for the UK wine industry.
“It is not only consumers who will feel the impact of price rises, but also more than a quarter of million employees in the world leading UK wine industry,” said Beale.
‘Serious impact’ on imports
Around 170,000 people are directly employed by the UK wine industry, and a further 100,000 through its supply chain.
The UK is the world's second largest wine trader by volume behind Germany, and by value after the USA.
Patrick McGrath, managing director of UK wine importers, said the fall in the value of Sterling was having a ‘serious and immediate’ impact on the sector.
“While currency fluctuations are an accepted risk for importers, three months on there appears to be little prospect of a return to pre-Referendum values,” he said.
“The importers are having to meet the increased costs, which is already having a significant impact on profitability.
“In the immediate aftermath of the Referendum we were covered forward for foreign currency. However this 'cushion' has now run out. This will mean that we will be forced to increase our selling prices.”