U.K. and Global Wine Markets by 2025, and Implications of Brexit

The United Kingdom has accounted for a major share of the world's wine imports for centuries, and wine accounts for more than one-third of U.K. alcohol consumption. It is therefore not surprising that suppliers of those imports and U.K. wine consumers, producers, traders, distributors, and reta...

Full description

Saved in:
Bibliographic Details
Published inJournal of wine economics Vol. 12; no. 3; pp. 221 - 251
Main Authors Anderson, Kym, Wittwer, Glyn
Format Journal Article
LanguageEnglish
Published New York, USA Cambridge University Press 01.08.2017
Subjects
Alcohol
Alcohols
American dollar
Consumer Price Index
Consumers
Consumption
Distributors
Economic models
EU membership
Foreign exchange rates
Imports
International trade
Markets
Tariffs
Trade agreements
Wines
World War I
United Kingdom > UK
Brexit
global wine market modeling
preferential trading agreements
Online AccessGet full text

Cover

More Information
Summary:The United Kingdom has accounted for a major share of the world's wine imports for centuries, and wine accounts for more than one-third of U.K. alcohol consumption. It is therefore not surprising that suppliers of those imports and U.K. wine consumers, producers, traders, distributors, and retailers are focusing on what the United Kingdom's planned withdrawal from the European Union (Brexit) might mean for them. In this paper, a model of the world's wine markets is used to project those markets to 2025 without, and then with, the occurrence of Brexit. The Brexit scenarios involve adjustment not just to U.K. and EU27 (the countries remaining in the European Union) bilateral tariffs but also to assumed changes to the United Kingdom's income growth and currency. The relative importance of each of these three components of the initial shock are reported, as are impacts on bilateral wine-trade values and volumes for still and sparkling wines. The results suggest that the impact outside the United Kingdom will be minor compared with other developments in the world's wine markets. Inside the United Kingdom, however, the effect of Brexit on incomes and the British pound are likely to have nontrivial initial impacts on the domestic wine market and to be far more consequential than the direct impact of changes in bilateral tariffs. (JEL Classifications: F15, F14, F13)
ISSN:1931-4361
1931-437X
DOI:10.1017/jwe.2017.19