The wine and spirit All-Party Parliamentary Group (APPG) has published a report exploring the consequences of the government’s proposed reform to alcohol duty for small to medium wine and spirits businesses.
As part of the October 2021 budget announcement, chancellor Rishi Sunak laid out plans to overhaul the alcohol duty system.
The new system would see beer and cider taxed at lower rates than wine and spirits, while the proposed small producers relief scheme will only apply to products under 8.5% abv, meaning some vineyards and distilleries will be unable to access its benefits.
Members of the wine and spirits APPG heard evidence from 15 small to medium enterprises (SMEs) who expressed concern over the treasury’s “complex and costly” reforms. Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA), said the government’s proposals will “increase the illogical and unfair treatment of spirits and wine” while also putting a strain on IT systems for SMEs.
“The APPG report is an excellent gauge of British SME businesses who believe the scheme proposed by the government is punitive and not fit for purpose,” he added.
SME owners have also spoken out against the taxation changes, with Kathy Caton, co-founder of Brighton Gin, saying: “I don’t resent paying taxes, I just want it to be fair across the board. The stifling duty costs act as a handbrake to growth for businesses like ours.”
The report advised the government to come up with an “alternative solution which is implementable and not drown SMEs in costly new red tape and administrative burdens”, and to offer support to smaller producers “irrespective of the alcoholic strength of the finished product”.
It concluded: “The government should recognise that the current proposal does not achieve its own suggested aim of being fairer and revise its proposals to apply a single rate of duty to all categories of alcoholic drink.”