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The U.K.'s extraordinary decision to leave the European Union will have enormous ramifications...but what form will they take for wine buyers and cocktail lovers here?
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.”
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.”
The 2015 Bordeaux futures campaign is over for England; that’s certain.
If the pound continues to drop against the dollar, savings could also be found when buying from English wine merchants. Jamie Ritchie, Worldwide Head of Sotheby's Wine, comments, "I think there is a short-term uncertainty which will create an opportunity for US wine buyers, both private and trade, to buy wines at advantageous prices from both the UK and Europe (notice they are now already separate!). In the longer term, certainty will return at the market will get back to normal. Nowadays, the timeframe for how this plays out will be a lot quicker than in the past, so the shock and awe of today will quickly pass."
Jane Anson of Decanter concurs on the short-term deals, saying, “The movement right now is the French, Asian and U.S. trade picking up stock in England as the pound slumps. Lots of stock is being cleared out, apparently. I’ve heard a few English merchants have shut up shop till Monday to digest what to do now.”
The Bordeaux-based Anson adds, “I’ve spoken to a few nègociants and château owners. Everyone was really convinced that clear heads would prevail at the last minute, so I think they are digesting it all today. But the 2015 Bordeaux futures campaign is over for England; that’s certain.”
Was Brexit inevitable? Many people were surprised by the outcome of the vote, but not James Truman, the former Conde Nast editorial director and now co-owner of the NYC restaurants Nix and Narcissa: “I would say the food movement anticipated Brexit thirty years ago, when British cooking was reborn by rejecting European influences and going back into the archives of what had once been a world-class cuisine. The great success of Heston Blumenthal’s Dinner, dedicated to reviving dishes from the past 500 years of British cooking, was surely an early indicator that Brexit was going to happen.”