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Italy’s wine industry fears Brexit woes

Ask Cesare Cecchi about Brexit and he wrinkles his nose as if he has opened a Chianti Classico from his 'Riserva di Famiglia' range and found it to be corked.

Italy's wine industry fears Brexit woes
Wine bottles on display at the Vinitaly exhibition. Photo: Vincenzo Pinto/AFP

“We are all very worried because the situation is very uncertain,” the chairman of one of Italy's best-known wine dynasties says of the implications of Britain leaving the European Union.

“We are only at the beginning of negotiations that will take two years and clearly could be influenced by factors from outside our world, political factors, whether that is in Britain, in Italy or in the rest of Europe.”

Cecchi is speaking at Vinitaly, a vast trade fair and get-together for industry insiders held every year in Verona.

READ ALSO: The 300-year-old story of what makes Chianti wine so special

With more than 4,000 exhibitors spread over almost 90,000 sq. metres and tens of thousands more buyers, reporters and amateur enthusiasts assembled, the vinous chatter never ceases.

And much of it this year has been about Brexit, less than a month after British Prime Minister Theresa May formally initiated divorce proceedings nobody in the wine world wanted.

Alex Canneti, a director of Berkmann Wine Cellars, a London-based importer, says his biggest fear is of food and drink becoming the focus for sniping that could sabotage hopes of a deal in the talks.

British Foreign Secretary Boris Johnson's recent warning that Italy would have to agree to free trade with Britain because it wanted to keep selling its Prosecco, was a case in point, he said.

“It was exactly what we were worried about. We just thought, 'Oh my God!'.”

Major market

Canneti told AFPTV he did not expect trade in areas such as banking services, nuclear technology or medicines to prove difficult.

“Whereas with things like cheese and wine, they might think 'we can use that to upset people',” he said.

“They know that, particularly in France, there are groups of vignerons that love burning trucks and getting angry. So it's a way of getting at Europe if Europe does not behave in the way the British would like them to.”

Apart from a recently-developed niche in posh sparklers, Britain has no wine production of its own.

But it has always been a thirsty place with deep pockets when it comes to booze, making it an influential player in the wine world.

Only the United States imports more and last year British imports from the other 27 EU states were worth 2.6 billion euros.

A nation of beer drinkers has become one that has embraced “Wine O'Clock” – the time-to-relax, early evening tipple that has helped to drive consecutive booms in the sales of Australian Chardonnay, Italian Pinot Grigio and, most recently, Prosecco, sales of which surged by a third last year.

Their success has made some wine-producing areas of Europe very exposed to the British market.

“Prosecco is huge, Rioja too. Bordeaux, Burgundy, Provence rose, you name it,” says Canneti.

No deal in the Brexit talks would mean EU wine potentially becoming subject to import duties while wine from Australia, New Zealand and South Africa could be coming in tariff-free if, as is expected, Britain moves quickly to negotiate new liberalizing trade deals with those countries.

Tax fears

Some say this will make little difference. All Chilean wine already enters Britain tax-free, as does a third of South African wine, under EU trading accords.

And the imposition of WTO-approved tariffs would add only 7-12 pence per bottle.

Not much if the bottle is from a top-end Bordeaux chateau, but it is equivalent to one to two percent of nearly  all the wine sold in Britain, and such margins matter when the pound's slide is adding to upward pressure on prices.

“Clearly the level of (import) tax is a crucial element, particularly as duty on wine in Britain is already very high compared to other European countries,” Cecchi said.

“Honestly I am very concerned, above all because of the uncertainty. But we have to hope that good common sense prevails. Don't forget that the UK exports just over two billion euros of spirits to Europe, it is in everyone's interest to have a good deal.”

READ ALSO: Why Italy is mulling wine classes for schoolchildren

Importer Canneti echoes the sentiment, urging the negotiators on Brussels to do a quick deal allowing current computerised customs arrangements which mean “lorries come in and get checked through the border” are maintained.

“It is all done on the internet and it means there are no queues or complications.”

Canneti also highlights another, less obvious, risk of Brexit: an interruption in the flow of talented, well-educated youngsters from the continent into Britain's food and drink sectors.

“Particularly the young Italians who have come in over the last few years, they have brought a lot to the British economy and we have got a lot out of it.”

By Angus MacKinnon

Want more wine news? Head over to our dedicated wine section for the latest curiosities and features from the world of Italian wine

NOW READ: Italy has opened the country's first free wine fountain

The first 'wine fountain' just opened in Italy - and it's free
Photo: Dora Sarchese Vineyard

 

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TRAVEL NEWS

EES: Could the launch of Europe’s new border system be delayed again?

After being postponed several times already Europe's new biometric Entry/Exit border system (EES) is set to be rolled out in October, but with fears of lengthy queues, problems with a new app and demands for more time, could it be postponed again?

EES: Could the launch of Europe's new border system be delayed again?

Could the entry into operation of the EU entry/exit system (EES), the new biometric passport checks for non-EU citizens at the Schengen area’s external borders, be delayed yet again?

Originally planned for May 2022, EES has already been postponed many times.

The current launch date, set for October 2024, was chosen to avoid periods of peak traffic and France in particular had requested to avoid it being launched until after the Paris Olympics this summer.

When asked to confirm the October start date this week a spokesperson for the EU’s Commission told The Local that the “roadmap” for the EES IT system foresees it will be ready for Autumn 2024. But the actual start date, in other words, the day when passengers will have to register, would be confirmed nearer the time.

The spokesperson said: “The exact date will be determined by the European Commission and announced on the EES official website well in time for the start of operations.”

READ ALSO: Your key questions answered about Europe’s new EES passport checks

But the reasons are adding up to suggest an October start date is optimistic, perhaps even unlikely.

In the annual report on the ‘State of Schengen’ published last week, the European Commission spelt out that severe challenges remain if member states are to be ready on time.

“In 2023, efforts to ensure the entry into operation of the Entry-Exit System in the autumn of 2024 were accelerated… While important progress has been made across the Schengen area, some Member States are still falling behind, notably regarding the effective equipment of border crossing points. The Commission calls on all Member States to urgently accelerate preparations to ensure the timely implementation of the system…”

A map in the report shows that preparation is still “in progress” in 13 Schengen area countries, including Germany, Norway and Switzerland. “Outstanding issues” still impact Portugal, Malta and Bulgaria.

The state of play for the preparations for EES across EU and Schengen states. Image: European Commission.

There are also reports that EU heavyweight Germany is trying to persuade Brussels to delay.

Matthias Monroy, editor of the German civil rights journal Bürgerrechte & Polizei/CILIP claimed on his website that “the German government is lobbying in Brussels to postpone the date once again, as otherwise the German tests of the EES cannot be completed in full. Other EU countries are also behind schedule, with only eight of them having reported successful integration.”

Even on a French government website it talks of EES being rolled out some time “between the end of 2024 and 2025” rather than stating October 2024.

And according to recent media reports, French airports have been advised to be ready for November 6th, rather than October. 

READ ALSO: EES and Etias – what are the big upcoming travel changes in Europe?

A planned EU app, believed to be essential to the smooth operation of EES because it would allow non-EU visitors to register in advance of travel will not be ready, Gwendoline Cazenave, Managing Director of Eurostar International, the company operating train services via the Channel Tunnel, has told the BBC. The EU however insists the app does not need to be up and running before EES is introduced.

In the UK, which will be heavily impacted by EES due to the fact it is no longer in the EU and so British travellers are no longer EU citizens, the House of Commons European scrutiny committee is conducting an inquiry on the potential disruption the introduction of the EES will cause at the border.

Several respondents have recently raised the alarm about the possible delays the system could cause, especially at the UK-France border, which is used by millions of passengers each year who head to France and other countries across Europe.

Ashford Borough Council in Kent has warned of the possibility of more than 14 hours queues to reach the Port of Dover, which has already been struggling increased checked after Brexit.

The BBC reported that back in March, a P&O Ferries director said the IT system should be delayed again.

Airlines have also complained about the fact pre-travel EES requirements would make last minute bookings impossible.

The Union des Aéroports Français (UAF), which represents airports in France, has simply said more time is needed.

In other words, it would be little surprise if the roll out was delayed again beyond October 2024.

But the Commission spokesperson told The Local that “the timeline for the entry into operation of the EES took into account all the necessary activities to be performed by all relevant stakeholders to ensure a timely entry into operation. 

“The Commission is working very closely with eu-Lisa [the EU agency in charge of the IT system], the Member States and carriers to ensure that everything is ready for the timely and successful launch of the Entry Exit System.

“The roadmap for the delivery of the new IT architecture foresees that the Entry/Exit system will be ready to enter into operation in Autumn 2024.”

New digital border

The EES is a digital system to register travellers from non-EU countries when they cross a border in or out of the Schengen area, the travel-free area. It will be deployed in 29 countries across Europe including 25 EU states plus Norway, Switzerland, Iceland and Liechtenstein. Ireland and Cyprus are the only EU members who won’t apply the EES system.

It doesn’t apply to non-EU nationals who are legally resident in an EU/Schengen area country or those with dual nationality of an EU /Schengen county. The system was designed to increase security and to ensure that non-EU nationals visiting the Schengen area short-term do not stay more than 90 days in any 180-day period.

Instead of having the passport stamped, travellers will have to scan it at self-service kiosks before crossing the border. However, fingerprints and a photo will have to be registered in front of a guard at the first crossing and there are huge concerns the extra time needed could generate long queues in the UK, where there are juxtaposed border checks with the EU.

Preparations are ongoing throughout Europe and some countries have made good progress.

In France, Getlink, the operator of the Channel Tunnel, has recently reported that new EES infrastructure is finished at its French terminal of Coquelles, which will allow travellers to register their biometric data while travelling.

Eurostar is also installing 49 kiosks in stations for the registration of passengers. But the Union des Aéroports Français (UAF), which represents airports in France, said more time is needed.

Exempted

Meanwhile, the Polish government has urged UK citizens who are beneficiaries of the EU-UK Withdrawal Agreement to get a residence permit “in the context of EES/ETIAS”, even though there was not such an obligation to stay legally in Poland post-Brexit.

“Having such a document is beneficial as it will exempt from future Entry/Exit System (EES) registration when crossing external borders and from the need to obtain an ETIAS travel permit in relation to short-term travel to EU/Schengen countries,” the government page says.

This article as published in collaboration with Europe Street news.

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