25.6.16 Consejo Worried at Potential Effect of Brexit; GB Buys Bodega in Chile

Britain is one of most important markets for Jerez. Only last year it imported 100,000 hectolitres of Sherry earning the bodegas 25 million euros, not to mention 15,000 hectolitres of brandy, so not a market the Jerezanos would want to lose, but Britain’s decision to leave the EU could have important effects.  Yesterday César Saldaña openly expressed the Consejo’s worry at the change in circumstances of the most important market for Sherry. “We can’t see a positive side to this and there will surely be effects. At this stage we don’t know precisely what they will be, so all we can do is to wait and see what happens, but it is certainly bad news.”

Cesar Saldana

“Whatever happens, the UK will continue to be a very important market for our products. In recent years the image of Sherry has improved and we don’t want to see that spoiled by increases on duties which could be imposed now that the UK is outside the EU. We’ll just have to wait and see. Any increased taxation could lead to falling sales and thus more unemployment.” While things could become more difficult he felt that free trade would probably continue, the status and movement of goods shouldn’t change, nor the legal apparatus which recognises the Denominación de Origen which took so long to achieve. But there is a worry that the reduced value of the pound will have a negative effect on pricing in the UK.

Francisco Guerrero, president of the growers’ body Asevi-Asaja said that “for the moment we don’t know how Brexit will affect us since everything is up in the air, but import duties are bound to go up and that will have direct repercussions on exporters at a time when sales were edging upwards. All the current legislation will probably change, but there is nothing we can do but wait and see.”

Rafael del Rey of the Observatorio Español del Mercado del Vino (OEMV) believes, on the other hand, that there shouldn’t be too much of an impact. He admits that there will probably be monetary effects in the short term which could hit exports, but things should even out. Who knows?

One of the Veramonte bodegas

González Byass has bought a majority shareholding in the Chilean bodega Veramonte, the first bodega they have bought outside Spain. Veramonte comes with 600 hectares of vineyard in Colchagua, Casablanca and Apalta and leading brand names like Neyen, Primus, Ritual and Veramonte. The wines are sold in 37 countries especially the United States, and GB believe that this acquisition can help with their distribution there.