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As we approach the Spring Budget, retailers and importers are being urged to write to their MPs and let them know how removing the temporary bracket for wine duty will impact their businesses.

At the moment, the bracket allows wines between 11.5% and 14.5% abv to be taxed at an assumed strength of 12.5% abv. Removing this bracket will mean producers and retailers have to calculate many more price points – and due to the nature of making wine, the trade could be faced with changing price points with every vintage.

Tim Ford, managing director at Domaine Gayda in Languedoc, explained – from a producer’s perspective – why it isn’t as simple as adding an abv to a label.

He outlined the practical issues that arise when winemakers try to predict the possible abv of a wine in advance of bottling. 

“As with a lot of wineries we will do the final blending of the wines about two weeks before bottling,” he explained. “We might be using three or four different tanks with different abvs to assemble the final blend. As we are searching for the taste profile, not the abv levels, we will only know the abv on the analysis after bottling.”

He said bottling runs are year-round. “We do not have a fixed date, also it can depend on sales,” he added. 

“The other main issue is we will change vintage within a year and it is quite usual that a different vintage will have a different abv, that means we could go from 13.5%, for example for the 2020 vintage to 14.5% for the 2021, which we release in July.”

He emphasised that wine is a terroir-driven product.

“The abv depends on the season, the rainfall, sunshine hours and so on, and as I said earlier, blending wines is driven by the taste profile needed, not a target abv.”

He emphasised that only when it is bottled can he determine the strength of a wine, which could be “just a week or two before delivery”.

Cambridge Wine Merchants co-founder Hal Wilson said he has heard this same message from several producers. He said that if producers can’t predict the abv then he can’t cost a wine until it is too late to publish price lists.

According to the Wine & Spirit Trade Association, if the bracket is removed, a different duty payment calculation would be needed for every 0.1% abv increment, which would mean 30 different possible payments between 11.5-14.5% abv, compared to one, currently.

Wilson said retailers and importers can implement strategies to protect themselves from other cost variables, such as forward foreign exchange contracts, long term contracts with freight companies or warehouse rent negotiations, but “there is no strategy to predict duty costs”.

“I believe the UK government knows that ending the easement would be terrible for wine importers, otherwise it wouldn’t have introduced the easement in the first place,” he added. “It has many other more pressing matters to deal with and the danger is that it does nothing to make the temporary easement permanent and the easement ends by default in February 2025.”

If you are an indie buyer and you would like to talk to Drinks Retailing or the WSTA about this, the teams will be at SITT London on February 28. For details, click here.