UK and Global Wine Markets by 2025, and Implications of Brexit

33 Pages Posted: 26 Jun 2017

See all articles by Kym Anderson

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES); Centre for Economic Policy Research (CEPR); Australian National University

Glyn Wittwer

Monash University - Centre of Policy Studies

Date Written: June 2017

Abstract

The UK has accounted for a major share of the world's wine imports for centuries, and wine accounts for more than one-third of UK alcohol consumption. It is therefore not surprising that both suppliers of those imports and UK wine consumers, producers, traders, distributors, and retailers are focusing on what the UK's planned withdrawal from the European Union (Brexit) might mean for them. In this paper a model of the world's wine markets is used to project those markets to 2025 without, and then with, Brexit. The Brexit scenarios involve adjustment not just to UK and EU27 bilateral tariffs but also to assumed changes to UK's income growth and currency. The relative importance of each of those three components of the shock are reported, as are impacts on bilateral wine trade values and volumes for still and sparkling wines. The results suggest the impact outside the UK will be very minor compared with other developments in the world's wine markets. Inside the UK, however, the effect of Brexit on incomes and the pound are likely to have non-trivial impacts on the domestic wine market, and to be far larger than just the direct impact of changes in bilateral tariffs.

Keywords: Brexit, global wine market modeling, preferential trading agreements

JEL Classification: F13, F14, F15

Suggested Citation

Anderson, Kym and Wittwer, Glyn, UK and Global Wine Markets by 2025, and Implications of Brexit (June 2017). CEPR Discussion Paper No. DP12109, Available at SSRN: https://ssrn.com/abstract=2992559

Kym Anderson (Contact Author)

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA 5005
Australia
+61 8 8313 4712 (Phone)
+61 8 8223 1460 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Australian National University ( email )

Arndt-Corden Dept of Economics
Coombs Building
Canberra, AK ACT 2600
Australia
+61 8 8313 4712 (Phone)

HOME PAGE: http://publicpolicy.anu.edu.au/crawford_people/content/staff/acde/kanderson.php

Glyn Wittwer

Monash University - Centre of Policy Studies ( email )

Victoria 3145, Vic 3800
Australia
61 3 9905 5421 (Phone)
61 3 9905 2426 (Fax)

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