The UK wine industry anticipates a period of turbulence as changes to alcohol duty are set to take effect.
- The government’s plan introduces more than 30 tax bands, complicating the current system significantly.
- Price increases for consumers are expected, with potential for some wines to disappear from UK shelves.
- Wines with 11.5% to 14.5% ABV, representing 80% of the market, will be most affected.
- Wine retailers are actively lobbying to prevent the implementation of the new duty regime.
The UK wine industry is preparing for a challenging period as the government moves to implement extensive changes to alcohol duty, scheduled to begin on February 1, 2025. This new system introduces over 30 tax bands, creating a substantially complex framework compared to the current structure. This shift has been met with significant apprehension from industry leaders who foresee daunting price hikes for consumers.
Steve Finlan, CEO of the Wine Society, a prominent organization representing 180,000 members, has voiced concern over the impending tax rules. According to Finlan, these changes could not only raise prices but might also lead to certain wines being withdrawn from UK shelves. Other significant entities in the wine trade, such as Majestic Wine and Laithwaites, have also expressed their unease regarding the government’s approach.
The changes are expected to have a pronounced impact on wines with an alcohol content between 11.5% and 14.5% ABV. The Wine and Spirit Trade Association (WSTA) notes that these wines constitute approximately 80% of the UK market. Under the imminent system, a typical bottle with 14.5% ABV could see an increase in duty from £2.67 to £3.09. Finlan highlighted the potential repercussions of this system: “The new duty system will have an impact on pricing across our industry and will result in higher costs for the UK’s wine consumers.”
Industry leaders fear that these price escalations could lead to a drop in consumer spending on wine, consequently reducing tax revenues for the government. Majestic CEO John Colley lamented, “This will restrict growth and threaten people’s livelihoods at a time when we should be doing everything we can to support our high streets.” The industry is thus striving to reform the upcoming duty rise, advocating for a review before it solidifies into policy.
In response to these challenging circumstances, wine retailers are vigorously lobbying against the new alcohol duty regulations. It has been reported that Majestic and Cambridge Wine Merchants have engaged directly with their customers, encouraging them to convince Members of Parliament to reject the duty changes. They warned customers about the adverse effects on wine quality and choice, emphasizing the potential administrative burdens that producers might face.
The looming duty changes pose a significant threat to the UK wine industry, which remains engaged in efforts to mitigate these impending challenges.
