The South African wine industry will be able to export close to 71.5 million litres of wine tariff free to the UK in 2021 despite the country’s exit from the European Union, says Michael Mokhoro, stakeholder manager of Vinpro and the SA Liquor Brandowners Association’s Winebiz desk.
This follows the signing of a trade agreement between the UK and members of the Southern African Customs Union (SACU), which includes South Africa, Lesotho, eSwatini, Botswana, Namibia and Mozambique that took place in September last year.
Makhoro indicates that the agreement aims to replicate the effects of the current partnership of the Southern African Development Community (SADC) and Economic Partnership Agreement (EPA) with the EU, which promotes market access through duty-free imports of certain products to EU countries, including wine.
Under the agreement between SADC and the EU, South Africa could export up to 114 million litres to the UK tariff-free which would increase by 1 million litres annually.
The agreement between SADC and the EU will come to an end on 31 December 2020 following the UK exit from the EU Single Market and Customs Union. The new SACU-Mozambique/UK agreement will come into force on 1 January 2021 for South African exports to the UK.
Implications of the new agreement
According to a press release by wine industry body Vinpro the tariff-free quota for imports of South African wine into the UK of 71.5 million litres in 2021, will apply to 30% bulk and 70% packaged wine, and is set to increase annually by 656 580 litres annually.
“It is important to note that when bag-in-box wine is exported to both the EU and UK, wine in a container holding 2 litres or less of an actual alcoholic strength by volume not exceeding 18% volume will be regarded as bottled, and wine of an actual alcoholic strength by volume not exceeding 18% is regarded as bulk,” says Makhoro.
Although the wine quota allocation will be accessible from 1 January 2021, Mokhoro says the South African government has decided internally that South African Revenue Service (SARS) should administer the wine quota on the basis of first come, first served.
“The labelling requirements will not change for wine exporters at this stage,” he reveals.
He indicates that the use of the name and address of an importer or bottler (in the case of bulk wine imports) based in the EU, UK or Northern Ireland will be permitted.
“Labels for bottled wine marketed in the UK can be used until 30 September 2022. As from 1 October 2022, wine marketed in the UK must bear the name and address of an importer or bottler located in UK.
“From 1 January to 1 October 2021, the requirements regarding the VI-1 form remain unchanged. The UK has granted the EU a grace period of six months (1 January to 30 June 2021) to use the VI-1 form. The UK has agreed to accept the EU standards for the next twelve months, with the possibility of a further six-month extension,” he says.
Vinpro reveals that wine that is bottled in the EU and exported to the UK, and vice versa, should continue to make use of the EU’s Euro1 certificate, which is acceptable in both countries. Export certificates will not be affected by Brexit and remain valid until their expiry date in 2021.