News Analysis: Italian winemakers will bear brunt if no post-Brexit trade deal is struck

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ROME, Feb. 7 (Xinhua) -- Already reeling from new tariffs on exports to the United States, Italy's wine industry could face a new set of obstacles if a trade deal isn't reached with the United Kingdom in the wake of Brexit, analysts said.

The UK formally left the European Union (EU) on Jan. 31. Its government was unable to finalize most of the trade agreements it said it wanted before that deadline. However, the two sides gave themselves until the end of the year to hammer out bilateral trade deals.

If no agreement is struck for Italian wines, analysts told Xinhua it could create two new hurdles for Italian wines: new tax barriers for exports from Italy to the UK, and the possibility that Italian wine trademarks will not be respected.

"We've been following Brexit closely, and it represents some real risks for Italian winemakers," Francesca Migliarucci, head of the international trade division for Italian wine industry group Federvini, said in an interview. "The most obvious is the danger of more tariffs, but the most complex involves intellectual property rights."

The UK could put tax barriers in place to give a competitive advantage to its growing domestic wine industry, analysts said. As global temperatures rise over time, the UK becomes increasingly viable as a wine producer.

According to analysts, the intellectual property risks come from the possibility that wines made outside the EU could be labeled to imply they come from Italy, even to the point of using the names of well-known Italian wines like Chianti, Barolo, or Amarone. With no agreement on intellectual property with Italy, those wines could be legally sold in the UK.

If either or both of the risks are realized, it would be an unwanted blow following the import barriers the United States put into place for Italian wine in 2019.

The United States and the UK are Italy's first and third largest export markets for wine in terms of overall value, respectively, importing a combined 2.3 billion euros (2.5 billion U.S. dollars) of Italian wines in 2018. Germany is second on the list.

"It's too early to know what the specific impacts would be, but we think negotiating a trade deal to reduce these risks should be a high priority for Italy," Lorenzo Bazzana, chief economist for Coldiretti, Italy's main agricultural association, told Xinhua.

Both of the potential Brexit-related impacts would be felt the most in northeastern Italy, where Italy's famous prosecco sparkling wine is produced.

According to Bazzana, prosecco is the most popular Italian wine in the UK, accounting for around half of the estimated 850 million euros (944 million U.S. dollars) in Italian wine exported to the country last year.

"There's no doubt that if no trade deal with the United Kingdom is reached, the prosecco producers will bear the brunt of the impact," Bazzana said. Enditem

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