With the English pound plummeting to its lowest point in thirty years after yesterday’s vote by Britain to leave the E.U. (“Brexit”), the wine, spirits, and to some degree food worlds are confronted by uncertainty.
Unsurprisingly, the effects will be felt most significantly in the U.K. market. New York hotspot bar PDT's managing partner (and all-around cocktail guru) Jim Meehan notes that London has one of the highest taxes on spirits and alcohol in the world. “Imagine if all E.U. products were taxed as imports in the U.K. French wine, German wine—you’ll see prices increase. Italian amaros will be even more expensive. And if Scotland exits the UK, Scottish whisky prices will go up, too. Entrepreneurs looking to open a bar in London may consider other cities such as Berlin, which could replace London as Europe's capital city. I don’t know how operators will be able to make ends meet, with cost increases even as businesses which fuel the service economy are pummeled by profit losses.”
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- How Brexit Will Change the U.K.'s Food Industry
Realistically, the effect on U.S. buyers in terms of spirits will likely be marginal, except for potentially lower prices on British spirits—for instance, in the up-and-coming artisanal British gin category. Red Johnson, founder and CEO of The British Bottle Company, who works with a portfolio of craft gins (Warner Edwards, Langtons and Pinkster, among others) as well as top English sparkling wines, says, “It’s been quite a day! But in the immediate term, the devaluation of the pound will help with competitive pricing in new export markets, in particular the U.S. and Asia. Longer term, it’s very hard to say as there are so many variables, but I’m an optimist. Regardless, we’re enjoying a rare bottle of Champagne this evening in solidarity with our French cousins.”