The UK wine industry is facing significant challenges due to upcoming changes in alcohol duty.
- From February 2025, a complex system of over 30 tax bands will be implemented, leading to consumer price hikes.
- Industry leaders warn these changes may limit wine availability and affect market growth.
- A major concern is the impact on wines with 11.5% to 14.5% ABV, covering 80% of the market.
- Wine retailers are urging government intervention to prevent potential economic drawbacks.
The UK wine industry is preparing to navigate substantial hurdles as the government moves forward with revisions to the alcohol duty system. Set to take effect from February 1, 2025, the new regime will introduce a labyrinth of over 30 distinct tax bands, significantly increasing the complexity of the existing framework. Steve Finlan, CEO of the Wine Society, which boasts 180,000 members, has articulated concerns that the revised tax structure will escalate prices for consumers and might even lead to certain wines being withdrawn from UK shelves.
The impending system is particularly troubling for wines with an alcohol content ranging between 11.5% and 14.5% ABV, which encompass roughly 80% of the UK wine market, according to insights from the Wine and Spirit Trade Association (WSTA). Under the updated regulations, a bottle of wine with 14.5% ABV could see its duty rise from £2.67 to £3.09. This anticipated increase is poised to impact pricing across the industry adversely, posing higher costs for British wine consumers.
“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,” Finlan expressed to the Daily Mail. Prominent figures in the industry are apprehensive that elevated prices might dampen consumer spending, which could inadvertently reduce tax revenues. John Colley, CEO of Majestic, emphasized the broader ramifications, stating, “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.”
Efforts are underway by wine retailers to lobby for governmental intervention to forestall the impending rise in alcohol duty. Majestic, along with Cambridge Wine Merchants, has reportedly reached out to clientele, encouraging them to contact their local MPs to oppose the new regulations. The communication highlighted the potential negative effects on both the quality and availability of wine options, cautioning that the administrative burdens could deter producers from continuing to supply the UK market.
The UK wine industry is at a critical juncture, seeking urgent government action to avert potential economic and consumer impacts from the new alcohol duty system.
