“Ludicrous, expensive and probably unworkable.”
Wine companies are urging customers to write to their MPs to “urgently” address a tax that has been placed on wine because of Brexit.
Labelled Sunak’s “sneaky Sauvignon surcharge,” the charge will see wine drinkers face paying more for their favourite bottles from February. Critics warn that the additional tax will raise some red wines by over 40p a bottle, as the number of tax band for wine goes from one to 30.
The change was announced in 2021 by the then-chancellor Rishi Sunak, who promised a “simpler, fairer and healthier” system. Sunak claimed that what was the “biggest overhaul of alcohol duty for 140 years” had only been made possible by Britain’s departure from the EU.
For the first time, the new charge will tax alcohol based on strength instead of categories, which included wine, sprits, beer and ciders. But the industry warns that because wine varies in alcohol strength depending on a number factors including the weather, the policy may increase the price of wine with alcohol content above 11 percent.
The proposed changes sparked an outcry within the industry.
The chief executive of Majestic Wine, John Colley, said the new alcohol duty system would cost businesses huge sums of money to administer.
Steve Finlan, the chief executive of the Wine Society said the plan was “ludicrous, expensive and probably unworkable.”
The industry has also warned that the levy placed on alcoholic drinks by the Conservatives will see some bottles disappear from the shelves entirely.
The outcry led to the policy being delayed. Instead, a flat tax for all wines between 11.5 and 14.5 percent alcohol was temporarily introduced, which accounts for 85 percent of the more than one billion bottles sold each year in the UK. The temporary system is set to end at the beginning of February.
Ahead of the autumn budget and the changes due to into force, a campaign has been launched by wine retailers, with posters being sent to customers and put up in shops warning that the Labour government has “inherited a highly controversial alcohol duty system which is due to be implemented on 1st February 2025…. This change will not only increase costs and complexity for wine retailers but could result in your favourite wine having to rise in price or potentially being removed from our ranges entirely.
“We need your help to urgently raise this important issue to your newly elected local MPs, and get this ill-conceived policy stopped before it is too late.”
Miles Beale, chief executive of the Wine and Spirit Trade Association (WTSA) explained how, with just over two weeks to go until the budget, the WTSA, its members, and independent wine businesses across the UK have reached hundreds of MPs in a bid to raise the issue of wine tax changes. He noted how the prime minister had promised to rip up red tape at the recent business summit.
“The PM and chancellor can avoid further bureaucracy by ripping up the last government’s plan to end the wine easement, which would suffocate growth in our sector. Keeping the temporary easement for wine stops the last government’s botched reform and ticks all the PM’s pledges. It will help businesses grow, keep prices down for consumers and stabilise Treasury income – but it needs to happen at the budget this month because businesses are running out of time to plan for next year,” said Beale.
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