Blog: Euro's sterling effort sinks the booze cruise
Olly Wehring | 15 June 2009
After going to the effort of building a tunnel to France, under the auspices of European unity, the euro's recent strength against sterling has negated one of said construction's main attractions - the ability to get cheaper booze more quickly.
Not only has the euro's recent strength against sterling played havoc with French wine exporters, it's also stopped everybody in the UK from traversing the moat to buy wine en France and cart it back.
Wine retailer Majestic said today that a slowdown in "booze cruises" to northern France has forced it to take a GBP5m write-down charge on its business over there. It has also shut a warehouse in Calais. Apparently, euro's strength has made French wine too expensive for it to be worth the effort.
Whoever pulls the strings up above clearly has an apt sense of timing, for, as Majestic announced the news, euro slipped to its lowest level against sterling this year - at GBP0.84.
At various points earlier this year, however, the two currencies have been near parity.
According to Majestic, even a 17% rise in duty tax on wine last year in the UK has failed to prop up the booze cruise to France, which for several years has been as close as much of the UK gets to an annual pilgrimage.
Naturally, there will be many others in the UK drinks trade, and also the bean counters in Her Majesty's Treasury, counting their blessings at this turn of events.
Chris M, dep ed.
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