The chief executive of the Wine and Spirit Trade Association (WSTA) has said the trade group is “hell-bent on trying as hard as we can” to ensure the temporary arrangement for wine duty becomes a permanent move.
Speaking at the Specialist Importers Trade Tasting (SITT) in London, Miles Beale told an audience of independent retailers, producers and importers that the WSTA is working to ensure the temporary measure, in which wines between 11.5% and 14.5% abv are taxed at an assumed strength of 12.5% abv, will continue beyond the 2025 cut-off. The temporary measure came into force alongside wider duty changes on August 1.
“We lobbied to achieve that concession, but we want it to become permanent,” said Beale. “We have 18 months to make sure that it becomes a permanent state of affairs. The difficulty of course is there will be a general election just before that. And therefore, we’re having to look at not only the current government, but also the one that might come next, which might not be one party it might be more than one.”
Beale added that the government had now amended inherited EU rules to allow wine to be labelled to 0.1% abv (previously the alcohol content had to be given to whole or half degrees – although the permitted tolerance for labelling purposes remained at +/- 0.5% abv). This was welcome given the measure was already permitted in some non-EU wine producing nations, such as Australia and the US. But this change alongside the new duty regime meant that the government has moved from three wine tax rates before August 1, 2023, to potentially 93 separate amounts per bottle in 18 months’ time. He said that this accumulating burden of additional red tape would be a key point when lobbying for keeping the temporary measure.
Discussing the burden on small businesses, audience members said vintage variation, especially in the wake of climate change, would add a great deal of work to running a business. One importer said the task would be a “nightmare” if the temporary measures don’t hold, given how many different producers they deal with.
The question of fine wine was also raised, with concerns around very old bottles that either don’t display abv or are unlikely to still be at the same abv.
“Keeping the current measures for wine between 11.5% and 14.5% would also take away the headache for government when it comes to dealing with those types of wines,” added Beale.
The WSTA chief exec said the organisation is working to help government understand the implications of removing the temporary measure.
“We’ve been working with our Australian counterparts and asking Australian ministers to explain the impact on the Australian wine industry for example,” he said. “The UK leaves the European Union, it does a trade deal with Australia and New Zealand more or less at the same time. And both Australia and New Zealand wine suddenly gets more expensive. The figure that we’ve given to the government that appears to have some impact was to say, ‘the Free Trade deal introduces a benefit that is then wiped out five times over by the new alcohol duty system’. That’s the kind of thing that we’re trying to do to help ministers understand that what they’re introducing is a bad idea.”
Elsewhere, Beale said the WSTA is working to agree a more straightforward approach to importer labelling. The new rules will mean that wine imported into the UK must carry the address of the UK importer or bottler (not an EU one), and are scheduled to come into play on January 1.
The WSTA consultant Simon Cairns, who was also part of the SITT discussion, said product that is already in market before the deadline does not need to carry fresh labels.
Beale said the WSTA is working with government to introduce wording used in the food industry that would allow both EU and UK addresses on a single label, removing the need for UK businesses to add additional labels.
“What we need is the UK Government to approve this approach that we think would work for Brussels as well,” said Beale. “So, my feeling is that it will happen, but it’s a really good example of something that’s a bit painful, simply because of the administrative logistics of having left a trade bloc.”
Beale said it is possible the deadline for importer labels could again be extended.