The Autumn Budget provides the Government with an opportunity to avoid causing significant damage to the wine trade, its customers and consumers at no cost to the Exchequer or to society by making the wine duty easement permanent. We urge anyone who shares our view to write to their MP, using our template letter if helpful, and ask them to support this change.
In August 2023 Rishi Sunak’s government introduced changes to the duty system. The headline was a 10.1% increase to alcohol duty. However, behind this was a fundamental change from taxing wine by volume to taxing wine by ABV. This has not yet been fully implemented – a temporary easement was introduced that retains the old system of a single rate of duty for all wines of 11.5% - 14.5% ABV, covering over 80% of wines.
This easement is set to expire on 1 February 2025. If this goes ahead, the Government will raise no more revenue from wine duty (indeed the WSTA forecast the duty receipts will fall), there will be no benefits for wider society and a hugely costly and complex administrative burden will fall upon the wine trade. This will inevitably mean higher wine costs for hospitality and retailers and, thus, their consumers. Here at Liberty Wines, we will have to employ an extra person to manage the complexity of the new duty system when we’d far rather be investing to better support our customers’ sales.
We also believe that taxing wine by strength is fundamentally flawed in principle. We strongly believe in the importance of selling wines with a specific sense of place. Such wines are not made with a specific ABV in mind but reflect grape, site and vintage. Taxing wine by strength suggests that Gunderloch’s ‘Rothenberg’ Riesling Spätlese 2022, at 8% ABV, is a “better” wine than Mura Mura’s ‘Starderi’ Barbaresco 2021 at 14%. This is not the case. They are both high quality but inherently different. Distorting the wine market through taxing by ABV undermines the ability to communicate and sell wine based on its quality. Selling higher-quality wine is particularly vital as the volume of wine sold in the UK continues to fall.
The Government can stop this damage at the Budget on 30 October by making the duty easement permanent. There is no cost to doing so and it will fit with their stated priority to encourage growth. We are encouraging our colleagues, customers and anyone else who shares our view to write to their MP and ask them to support making the wine duty easement permanent. You can find a template letter for doing so here. If you have any questions, please contact us.
How to download the letter template
The letter template is hosted with Adobe Acrobat to make it as easy as possible to download and use. Just select the three dots '...' next to the link sign, to the top right of the document and select 'download this file.
