Search for new markets amid fears UK trade could suffer.
The UK and Portugal have been trading port wine for centuries. The port business was largely developed by British families who arrived in Portugal in the 17th century. They have survived grapevine diseases, assassinations, revolutions and the dictatorship. But now they are facing a new threat...
“Brexit is a major disruption,” says Taylor's CEO Adrian Bridge. “For our business the reality is that since the vote of June 2016 we have seen the value of sterling fall by 15%. It's perfectly possible if they exit with a hard deal that the pound will fall another 15%. That will be calamitous for our business, because the only way we would be able to continue to do business would be to raise prices and I don't think the UK/British consumers would be prepared to pay a further 15% for a glass of port. So, our business would potentially halve and that's serious.”
The UK market is one of the main markets for port wine exports. It represents 25% of Taylor's sales.
“If our business to the UK would halve,” says Bridge. “It would cost around 10 million euros of sales, which would be significant for us, the Douro Valley and all our employees. You can't easily find a new market. It takes time to build. If we leave with Mrs. May deal or with a hard Brexit there will be at least another 4 years of uncertainty and in that uncertainty that it becomes very, very difficult to do business.”
“The important thing for these companies is to clear up this uncertainty;” says Gilberto Igrejas, president of Port and Douro Wines Institute. “Because in reality, what’s more important than what is going to happen with Brexit is knowing how we're going to manage new markets in this new European situation.”
When Brussels and London reached the Brexit deal, Portugal considered it was good for the Portuguese interests, because it protected the Port Wine industry. But now with the deal at risk, uncertainty is more than ever the keyword for this historic trade between Portugal and the UK.