Italians worry the UK might buy less prosecco in the wake of Brexit vote and the fall in Sterling

Francesca Washtell
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The UK now drinks more prosecco than champagne (Source: Getty)

Italian prosecco producers have been spooked by the UK's vote to leave the EU last week, worrying that the hit to the pound could "upset" trade and send sales flat.

In a statement released last week Coldiretti, the association of Italian food producers, warned that the devaluation in Sterling could disrupt Britain's place as the number one export market for the posh tipple.

Today the pound crashed to a new 31-year low against the dollar, dropping 3.3 per cent to $1.3180, as markets continued to stew over the UK's Brexit vote last Thursday.

Exports of prosecco to Britain grew at a rate of 38 per cent in the first quarter of 2016, according to Coldiretti, while for more than a year Britons have spent more on the Italian fizz than its traditionally more popular, French cousin, champagne.

However, Toby Magill, head of the alcohol and impulse team at IRI Business Insights, told City A.M. it is still too early to tell if the effects of a Brexit vote will have a long-term or deep impact on the industry.

Read more: Drink up quick: A prosecco shortage could be coming

"Exchange rates are likely to have the most immediate impact. With the falling pound, anything from the eurozone is going to get more expensive to purchase which may result in increased prices for the consumer," Magill said.

"Sales are unlikely to be affected in the short term as no one is clear what is happening so behaviour hasn't changed. However if Britain slips into recession due to the Brexit and people have or feel like they have less money to spend then sales of luxury purchases such as Prosecco may slip backwards.

Read more: Blasphemy: Now we can even buy "skinny" prosecco

"From a producer's point of view it is hard to say what the impact is, until the negotiations start and they can see what the trading relationship between the UK and the EU is actually like," Magill added.

"Again this could result in higher prices to consumers as any extra costs will probably get passed on to them."

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