Calls to rethink tax shake-up as wines headed for ‘largest single alcohol tax rise in UK history’

A leading wine trade association has been calling on the government to rethink the recently-announced sweeping overhaul of alcohol duties amid warnings by wine importers that port and sherry are about to be hit with the “largest single alcohol tax rise in UK history”.

The Wine and Spirit Trade Association (WSTA) is concerned the higher prices will kill off the sales revival being enjoyed by fortified wine makers and has been calling on the government to rethink the plan which is the subject of a consultation that runs until the end of January.

A shake-up of alcohol taxes may end up adding at least £1 to bottle prices next year, reports said.

Wine importers have warned that port and sherry are about to be hit with the “largest single alcohol tax rise in UK history” after chancellor Rishi Sunak had announced a sweeping overhaul of alcohol duties in the budget, reducing the tax take on lower-strength drinks, such as draught beer, but increasing them on products, such as fortified wine, with an alcohol content above 11 per cent.

“Local wine merchants up and down the country are aghast at the suggested tax rises, which will see port and sherry brands such as Taylor’s and La Gitana take on the largest single alcohol tax rises in UK history,” Andrew Hawes, the managing director of the wine importer Mentzendorff told The Guardian.

“Ultimately I fear it will be the consumers who will pay the price, which is a shame especially as we’ve invested so much to attract a new following to the joys of these fortified wines, which to date have offered incredible value.”

Another importer claimed  it made “absolutely no sense” to target the fortified wine category as sherry and port were “enjoyed in moderation” by friends and families on special occasions.

“If the proposals remain unchanged it will result in the retail price of a bottle of port increasing overnight by £1.09,” Steve Moody, the managing director of Fells said. “That’s an immediate increase of more than 13 per cent.”

WSTA, meanwhile, is concerned the higher prices will kill off the sales growth  of fortified wine makers, who have won a new, younger fan-following after the emergence of Fino bars. Sherry has also become a popular ingredient in homemade lockdown cocktails with UK sales up 13 per cent in 2020.

While some alcoholic beverages can be adapted to bring down their alcohol content or ABV, there are strict production rules for port and sherry that do not allow producers to tamper with strength.