UK wine businesses join forces to call for freeze in wine duty
UK wine businesses have joined forces to call for a freeze in wine duty at the Budget next week.
A total of 21 of Britain’s wine businesses have signed a letter written by the Wine & Spirit Trade Association calling for Philip Hammond to scrap the planned tax rises and back the industry which supports more than 277,000 UK jobs.
In March the Chancellor increased wine duty by 3.9% which added 8p to a bottle of still wine and 10p to sparkling. The Chancellor now plans to increase wine duty again by 3.4% in the November Budget, adding another 7p to still and 9p to sparkling.
It is believed that the government plans to raise wine duties by 3% for every year of this Parliament, meaning that by 2022 the industry will be hit with an additional £1.2bn in new duty collections.
The WSTA market report, which is due to be released next month, is set to show a 22p increase on the average price of a bottle of wine to £5.62 this quarter, compared to the same period last year. This is a 4.2% increase on last year already, before the planned 7p rise in the Budget next week.
An average priced bottle of still wine in the UK is £2.16 with £2.77 added as duty, while sparkling wine attracts even more duty.
For a wine importer selling one million bottles of wine at average bottle price, duty would account for 40% of turnover from those bottles.
John Charnock, managing partner at Jascots Wine Merchants, said: “These hugely unfair tax burdens mean that cash flow is severely restricted and stifles growth for everyone in our industry. We absolutely support a freeze to wine duty, particularly as this is an opportunistic second increase this year and comes at a time the government knows that alcohol sales increase considerably over the festive period.”
In France where the wine industry is heavily supported, consumers pay the equivalent of just 7p a bottle on duty for sparkling and 3p for still.
The UK wine industry is the most heavily taxed in Europe after Finland and Ireland. Britain pays 68.37% of all wine duties in the EU.
The UK is the world’s second largest importer of wine by volume and value.
Miles Beale, chief executive of the WSTA, said: “A second rise this year will hit businesses hard at a time when they are dealing with higher costs through rising inflation, meeting the challenge of Brexit and decreasing consumer confidence. This will be particularly hard for our industry, its suppliers and consumers, to swallow, coming in the middle of the trade’s busiest period – Christmas.
“We are calling on the Chancellor to put a cork in his planned wine and spirit hikes and back British businesses and consumers, who currently pay some of the highest levels – and by far the largest share – of wine duties in Europe.”
The 21 signatures include:
Fergal Tynan at Alliance Wine
Dan Jago at Berry Bros & Rudd
Julian Dyer at Australian Vintage
Paul Schaafsma at Broadland Wineries
Duncan Brown at Brown Brothers
Craig Durham at Buckingham Schenk
Simon Lawson at Castella Brands
Simon Doyle at Concha y Toro
Diana Hunter at Conviviality
Richard Cochrane and Angus Jones at Felix Solis
Mark Symonds at Fells
Patrick MacGrath at Hatch Mansfield
Miles MacInnes & David Charnock at Jascots
Will Oatley at Louis Latour
Paul Lethern at Off-Piste Wines
Laurent Pillet at Pernod Ricard UK
Tom King at Treasury Wine Estates
Andrew Baker at Virgin Wines
Nicholas Hyde at Vranken Pommery
Jo Wehring at Wines of South Africa