Drinks Retailing’s opening session on the Monday (May 19) of the London Wine Fair brought together leading voices from across the UK wine sector to unpack an increasingly volatile global trade environment and the ongoing disruption of global wine flows.
On a panel which included Simon Stannard, director of policy at the WSTA, and Daniel Lambert, MD of Daniel Lambert Wines, tariff turbulence offered a window to wider the struggles retailers and importers currently face.
While tariffs and protectionist policies remain at the heart of global trade tensions, it became clear that UK wine businesses are feeling the strain through a broader web of disruption, including surging costs, squeezed margins and volatile supply chains. During Monday’s discussion, the panel industry described a landscape fraught with unpredictability, but also opportunity.
Amid this turbulence, Hal Wilson, co-founder and wine buyer at Cambridge Wine, highlighted how excise duty hikes and inflation have heavily eroded retailer margins. “We’ve had 30% increases in excise duty in less than two years,” he noted.
Wilson also pointed out that over 50% of UK wine sales are now tax, warning that the UK is becoming an unattractive destination market due to compounded regulatory burdens.
Lambert meanwhile highlighted how trade disputes elsewhere have indirect but significant consequences for the UK, for example the China / Australia dispute which decimated the latter’s largest export market almost overnight back in 2021.
However, he warned against assuming that the UK would benefit from EU wines being shut out of the US market, pointing to how wine heading to China was eventually re-routed.
He said: “Will we see better deals? Not necessarily. That volume is going to other markets, into emerging markets like India and Southeast Asia. It won’t come to the UK. We’re on a slippery slope in this country due to government interference.”
As shipping challenges and rising logistics costs mount pressure on UK importers, Wilson noted how general oversupply is at odds with declining consumption. It’s an issue that picked up on the WSTA’s earlier morning briefing, where David Richardson, regulatory & commercial affairs director, said the UK’s inbound wine supply is caught up in “other people’s traffic jams”.
Mitchel Fowler, founder and CEO of finance and supply chain platform Ferovinum, pointed to resilience as the key battleground.
“We’ve spent years building a platform that helps importers and distributors not just survive volatility but take advantage of it. There’s risk aversion now, particularly among large retailers and that’s affecting product ranging. So for the independent part of the sector, there’s an opportunity there to capitalise on consumer interests,” he said.
He also stressed the importance of keeping stock levels healthy: “UK wine trade margins are they were incredibly thin 10 years ago. They are razor sharp now, so we’re navigating this perfect storm. And if we’re out of stock on something, and we’re using losing two months’ revenue on a listing for a core item, we don’t have any fat to absorb that kind of pain. It doesn’t matter what level of the market you’re at, whether your largest import agency business or a small independent, no one has the margin to absorb that type of disruption at the moment. So making sure you’re running stock that’s deep enough to actually capture the revenue without overcommitting is also really important.”
Policy & regulation frustration
UK-specific challenges, from the EPR scheme to duty reform and wage hikes, are the other slices of the pie – and are widely viewed as UK government-imposed headwinds which further exacerbate the situation. There was broad agreement that the wine industry needs earlier and deeper collaboration with policymakers, mirroring Australia’s integrated trade model.
As uncertainty mounts, businesses are left with less room for error. Here, Stannard noted that duty rises are being planned without economic reality in mind.
“The Treasury just assumes that if you put duty up 5%, revenue will rise 5%. But that’s not what happens. Consumption is declining, and they won’t listen to the real sales data,” he said.
He also noted that some foreign governments offer more direct support to their wine sectors.
“I look at colleagues from other wine producing countries who are in the room with regulators during trade negotiations. Australia is a really good example. That’s the relationship we want with government now, to have be much closer and be trusted. I think there’s an opportunity to reset,” he added.
Despite the storm, panellists struck a hopeful note, pointing to innovation, cross-industry collaboration and leveraging UK wine’s cultural value as potential paths forward.
“It’s time to stop being passive,” said Fowler. “This is an industry with joy, culture and story. We need to fight to preserve and grow it.”
The session concluded with a call for unity and optimism. Now is the time to maintain wine’s relevance. In order to survive – and even thrive amid – the shifting tectonic plates of global trade wars, industry players must work together on trade, education and storytelling to meet the challenges head-on.
