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As Brexit Day draws ever closer, the negotiations between the UK and the European Union have reached a critical point this week, with the European Council set to meet on Wednesday to discuss what happens next. In two separate statements, released today, two drinks trade associations have sounded the alarm bells about the consequences of the two sides failing to reach an agreement.

Weve got a busy Brexit week ahead

We've got a busy Brexit week ahead

Here, according to SpiritsEurope and the Alcohol Beverage Federation of Ireland, is what a 'no-deal' Brexit would look like.

SpiritsEurope

  • A cliff-edge scenario would impact shipping procedures between the UK and the EU-27. UK producers may no longer be able to access the EU Excise Movement & Control System (EMCS). Customs clearances and export-import declarations may be required for UK-EU movements and vice versa, which would cause a sudden increase in administrative procedures, which would in turn cause delays at borders, disrupt delivery and product journey times
  • While tariffs are not expected on finished spirits products between the EU and the UK, under the EU's WTO commitments, small tariffs could come into effect on imported inputs sourced from the EU, including barley, glass and closures. Depending on the UK's future trade policy, there could also be tariffs on EU imports from the UK without a deal. This would increase production costs for spirits producers
  • The spirits sector currently benefits from import tariff reductions secured through EU FTAs. Without a transition period, the UK would no longer be party to these FTAs as of 30 March and higher tariffs may be payable upon import. This would add cost across the EU spirits sector

Alcohol Beverage Federation of Ireland

  • A lack of continuity in legal protection for Irish cross-border Geographic Indications for Irish whiskey, Irish cream liqueur and Irish poitín in Northern Ireland and the UK
  • A lack of continuity in access for Northern Irish producers to global free trade opportunities
  • Immediate tariffs on barley, malt, glass bottles, apples, finished cider and other supply chain inputs
  • Regulatory and customs checks at the Irish border, leading to significant delays and additional costs for 23,000 cross-border truck movements
  • The requirement for up-front VAT payments on cross-border trade
  • The potential for regulatory divergence across a range of standards from labelling to bottle sizes

So, what of the future relationship between the UK and the EU, post-Brexit? Here's SpiritsEurope with its best-case scenario.

  • Trade between the EU27 and the UK to be as seamless as possible, especially on the island of Ireland. Customs procedures to be predictable and robust, with a phased introduction if there are any new arrangements
  • The EU and the UK to jointly maintain, defend and protect GIs and their use in trade agreements to ensure product quality and promote the commercial interests of rural communities
  • Ensure seamless VAT and excise procedures between the EU and the UK, particularly with a view to protecting integrated all-Ireland supply chains
  • Zero tariffs for finished goods and raw material inputs, including dry goods, glass bottles etc, that are supported by integrated and aligned customs protocols and regulatory cooperation/stability on alcohol products

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