- The introduction of importer labels stands to cost a typical fine wine merchant tens of thousands of pounds
- The EU regulation, rolled into UK law after Brexit, is currently under review
- For fine wines, not for immediate consumption in the UK, it may be advisable not to apply labels at this stage
What are importer labels and why are they being introduced into UK law?
For the EU market, importer labels identify the legally responsible business (usually the bottler, vendor or importer) for non-EU wines entering the single market from a third country. These labels need to be applied to each bottle or container. Following the UK’s exit from the European Union, EU wine labelling rules were rolled into UK law. These rules are currently only applicable in the UK to wines arriving from outside the EU e.g. the USA, Australia, South America etc, but they will apply to EU wines too once the new rules come into effect.
When is this happening?
The implementation of these new rules was delayed until 30th September 2022. After that point, wine being sold to UK consumers that has arrived from the EU (ie released from a UK customs bond) will require a UK based vendor or importer address on the label to give the consumer recourse to a UK based business in the event that any issues arise with the product.
Why is this a problem?
These new labelling requirements will potentially add substantial new costs to wine merchants and EU producers, particularly for those trading in small quantities or purchasing/selling products in the secondary market. UK specific labelling acts as a trade barrier, not just for unlabeled wines entering the UK market, but also to wines returning to third countries like the EU, which will need to be relabeled to comply with UK/single market rules. This adds considerable new friction and costs to fine wine merchants based in the UK, who will need to check, remove and replace labels to ensure that they comply with rules in the destination market. Indeed, wines carrying additional merchant labels do not comply with Liv-ex Standard (SIB) Terms. Non-standard items can trade at a substantial discount on the secondary market.
What should I do?
The Wine & Spirits Trade Association (WSTA) is lobbying the UK Government to get this legislation changed. Should you wish to support the WSTA’s efforts in this regard, they would welcome new members to help with their efforts to lobby on your behalf. While the Department for the Environment and Rural Affairs (DEFRA) are aware and sympathetic of the challenges faced by the trade, the issue is unlikely to be rectified prior to the 30th September deadline.
If you are currently importing wines from the EU that you are sure will be released and drunk in the UK market, it might be prudent to ask suppliers to add importer labels, but for the vast majority of fine wine entering the UK, adding GB importer labels might seriously impinge on your ability to resell these wines in the secondary market. Moreover, labelling costs might prove wasteful should the UK Government subsequently amend the rules at a later date. In most cases, therefore, it would seem prudent at this point to wait and only label wines once they are released into general circulation.
Liv-ex Account Managers will answer any questions that members have. Not yet a Liv-ex member? Click here.
James Miles of Liv-ex will be chairing a WSTA Fine Wine Committee meeting in the months ahead to discuss importer labels and other issues affecting the trade.
