Alcohol imports into the UK face double whammy of UK-EU rules and Panama Canal delays

Thu 14 Dec 2023
Posted by: Richard Cree
Trade News

Wine

Following warnings that UK consumers face a potential shortage of wine in January due to supply chain disruptions caused by ongoing problems at the Panama Canal, trade experts have issued a further warning over fresh concerns that new rules coming into force on 31st January 2024 will also risk imports of wine, beer and spirits from the EU.

Grape escape

The Institute of Export & International Trade (IOE&IT) has warned that, while goods leaving the UK for the EU are already subject to checks, the new Border Target Operating Model (BTOM) will impose new checks on certain EU imports to the UK, including food and drink products, for the first time since Brexit.

Alcoholic products, as well as food products such as eggs, dairy and meat, will be subject to new border checks. The UK is the second largest wine importer in the world, with the majority of imports coming from France, as well as Italy and Spain – with a total combined value of just under $2.94bn. 

But BTOM rules could stifle the flow of wine. Since the UK left the EU, British winemakers, brewers and distillers have struggled to export goods into the European market, due to increased customs checks on their products.

Panama problems

According to IOE&IT, EU businesses looking to export alcohol to the UK will have to go through strict customs controls and use a new electronic system (Customs Declaration System or CDS) to make their declarations.

If EU businesses face similar issues with these checks, from the end of next month, the UK could see delays to alcohol supplies hitting supermarket shelves, as EU winemakers grapple with the changes.

This hit to wine supplies from the EU would come at a time when similar imports from the Americas are threatened by shipping delays caused by drought in the Panama Canal. UK favourites such as Californian Chardonnay and Chilean Merlot make their way via international shipping routes affected by reduced use of the canal.

The IOE&IT perspective

Marco Forgione, director general at IOE&IT, comments:

“The shipping delays through the Panama Canal, which are impacting South America and [the] west coast [of the] US have come at a doubly unfortunate time. Not only do they threaten alcohol supplies during the peak festive season, but they’re happening weeks before new rules could impact imports from the EU.

“While business in the UK are getting used to checks on products going to the EU, the checks BTOM introduces for EU goods coming the other way will be new. These procedures will take time to bed in, so there’s a risk we’ll see disruption to supplies of our favourite drinks and other food. This could lead to gaps in supermarket shelves. We need to make sure UK and EU businesses are fully aware of what is coming.

“2024 will be a pivotal year for international trade, with over 20 major new measures coming into force that will impact the UK and our overseas trading partners. This raft of changes will usher in much-needed changes, including the digitalisation of trade and cutting of red tape, ultimately making international trade easier and more lucrative.

“But to make the process as frictionless as possible, we must prioritise education and hands-on support for UK businesses and those we trade with around the world if we are to ensure they are a success.”

The IOE&IT has launched a whitepaper outlining the upcoming policy changes in 2024 and what they mean for UK traders. Alongside the whitepaper, it has developed a series of questionnaires hosted on its website which help businesses understand which changes will have an impact on them.

By completing the form, businesses will get access to IOE&IT trade experts who will provide recommendations to help them navigate this period.