The UK Government’s proposed Alcohol Duty Review states that it will not increase overall taxation on wine sold in this country. However, the legislation includes proposals that would deal harm in terms of price increases to many bottles sold owing to the ABV cut-off point for lower duty.
Simon Doyle, General Manager at Concha y Toro UK, has spoken out against the potentially damaging tax increases for the vast majority of wine drinkers.
“As a leading wine importer in the UK, and one of the instigators of the Wine Drinkers UK lobbying group back in 2019, we know it is essential that the Government understands the full impact of the proposed changes to alcohol duty on the wine industry,” he said.
“The government has stated that it does not seek to increase the total amount of duty revenue raised via the proposals. However, our 96 million bottles of market-leading brands of wine sold in the UK each year have an average ABV of 12.9 per cent, and most of the other leading still wine brands in the market are at similar or higher average ABVs.
“On this basis, under these current proposals with the crossover point at 11.5 per cent* our goods would incur at least an extra £28 million in duty levied on consumers each year. This is equivalent to +29p per bottle of wine, an increase of 13 per cent versus current duty (already one of the highest rates in Europe) and this before additional 20 per cent VAT is added. This is a regressive step versus consumer expectations of a lower-tax economy post Brexit. The Chancellor is proposing that we use Brexit freedoms to tax consumers’ favourite alcoholic beverage even more. These proposals are both unfair on consumers and unworkable for the trade.”
*whereby goods with lower ABVs would incur lower duty rates than currently, all those above progressively higher rates
