The UK government is set to introduce a contentious alcohol duty regime by February 2025.
- The new regime will implement over 30 tax bands, affecting wine prices significantly.
- Industry leaders warn of potential price hikes and reduced availability of popular wines.
- Major wine retailers are lobbying against the proposed changes to protect their businesses.
- Concerns include a potential negative impact on consumer spending and government revenues.
The UK wine industry is on the brink of tackling a formidable challenge as the government moves to overhaul its alcohol duty system by February 2025. This decision will introduce a complex structure encompassing over 30 distinct tax bands, thereby complicating the existing arrangement considerably.
Steve Finlan, the CEO of the Wine Society, highlights that the new tax framework is likely to translate into increased consumer prices, warning that some wines may disappear from UK shelves altogether. His concerns echo those of other prominent players in the industry, such as Majestic Wine and Laithwaites.
The reform is poised to particularly influence wines with an alcohol content ranging from 11.5% to 14.5% ABV, which constitutes about 80% of the UK wine market, as reported by the Wine and Spirit Trade Association. Under the new regulations, a bottle at 14.5% ABV could see duties augment from £2.67 to £3.09.
Finlan shared with the Daily Mail that the revised duty system is expected to elevate the cost of wine across the board for UK consumers. John Colley, CEO of Majestic, added that inflated prices might suppress consumer expenditure, potentially impacting tax revenue negatively. He remarked, “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.”
In response, wine retailers are urging the government to reconsider the impending duty hike. Both Majestic and Cambridge Wine Merchants have actively reached out to customers, encouraging them to influence their MPs against the measure. They caution there is a risk that certain favoured wines may cease to be shipped to the UK due to the increased administrative demand involved.
These planned changes create significant uncertainty in the wine sector, demanding urgent reconsideration of the duty framework by the authorities.
