(Bloomberg) -- For the better part of two decades, the French port city of Calais has enjoyed a steady stream of Brits making a quick stopover with one mission in mind: to stock up on wine and other alcohol at a steep discount and haul the goods back to the U.K.
Wine warehouses like Calais Wine Superstore, with the charm of an aircraft hangar but the attraction of prices much lower than back in the U.K., welcomed British buyers who would arrive by car or ferry. People could bring back the equivalent of 120 bottles of wine for a single trip, and lower taxes as well as a strong pound prior to Brexit added to the savings. For anyone planning a big gathering, be it a wedding or a New Year’s bash, Calais provided the booze for the budget minded.
Now the party’s over. Brexit has pummeled the pound, depressing British buying power. Travel has dried up because of the pandemic, and all those big celebrations that were supposed to happen this weekend were put on hold by social distancing. With the U.K.’s break with the European Union sealed by the end of the Brexit transition, the bottle allowance has also come down to a point where retailers say it might make little sense to keep going.
“They just come, they taste, they load up the car and they take it away,” said Guy Boursot, the founder of Boursot Vins just outside Calais, who says customers from the U.K. make up 85% of revenue and would often stock up more than 300 bottles on a single order for events like weddings. The lower bottle allowance “would have the effect of killing our business.”
While there’s statistical evidence that people are drinking more wine while stuck at home, the giant warehouses lining the French coast on the English channel have now become a wasteland, their future in doubt. John Colley, the chief executive officer of Majestic Wine, said his company is considering its options amid Brexit and the change in the purchase allowance.
Across the street from Majestic sits the Calais Wine Superstore, whose business has suffered a massive blow by the pandemic and lack of visiting Brits. Co-founder Marco Attard estimates that revenue for 2020 will be down 65% compared from a year earlier as his business absorbs the triple impact of the coronavirus, Brexit and the lack of alcohol-fueled parties.
“We’re a travel business,” that caters to Brits, Attard said by phone. “The pandemic has been very hard for us,” and the first quarter will be “very tough,” he said.
Attard’s business currently operates with a staff of five, a mere quarter of the employees from a year earlier following a series of furloughs and redundancies. Majestic has already been through a deep reorganization over the last few years. It bought online wine retailer Naked Wines in 2015 to expand internationally, and then in 2019 the company was split. The Majestic retail and commercial businesses now run by Colley was sold to Fortress Investment Group.
For a long time, the booze cruises were a comfortable arrangement for both sides. To make the trip more attractive still, some local wine merchants subsidized visitors’ trip from the U.K., which takes about 35 minutes through the tunnel and costs from 62 pounds ($85) round-trip with the car loaded onto train carriages.
Now the lack of visiting Brits also deals a blow to the wider Calais economy. Every year since 2015, visitors from the U.K have represented around 11% of spending in Calais, with spending on food twice as high, according to figures by the local French chamber of commerce.
The last few weeks of the year typically saw a mad dash of champagne-starved Brits stocking up in Calais ahead of the festive season. But now the latest full lockdown in London and other parts of England have quashed any movement, and a mutant strain of the coronavirus even prompted France to temporarily shut its border to the U.K. last month, cutting off an important artery for the Calais alcohol trade.
“We were hoping for one last firework in the last quarter of the year before the good bye but it hasn’t happened,” said Jerome Pont, the founder of the Calais Vins outlet.
Among past visitors is Amber Vellacott, 25, from Folkestone in South East England, who says she used to go every year with her parents to stock up on alcohol in Calais. It worked out cheaper to pay the tickets for the tunnel and stock up than it buying in the supermarket back at home every weekend.
Last year, the family opted out because of the pandemic, and Vellacott said they may give up altogether if Brexit makes things too complicated.
“I’m not sure what the plans are for , but I know if it’s going to be any more difficult than it has been to get there normally, then we’ll probably won’t go,” she said.
That sort of behavior is unwelcome news for merchants like Boursot, who set up his namesake store in 2006 and expects revenue to drop by 15% in 2020 from 2019. Boursot says he’s managed to soften the blow from the lockdowns and quarantines by sending out wine to his 8,000 loyal customers.
“I’ve been in the wine business all my life and it’s not something that I’m going to give up like that,” he said.
For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2021 Bloomberg L.P.