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New Alcohol Duty Could Slam Small Wine Sellers

new alcohol duty

Outlined in October’s Budget, market leaders are expressing concern that the proposed changes to alcohol duty, specifically on wines, could leave smaller wine sellers struggling and give the UK public less choice at higher prices.

Previously, wines were taxed by three categories: still wine, sparkling wine, and fortified wines. The new changes have been labelled an “administrative nightmare” as these potential classifications change from three to twenty-seven different bands of tax. With the WSTA calculating that the changes could cost the wine trade an additional £250m every year to implement and correctly execute, the new system could be unsustainable for many small-to-medium sized businesses in the industry.

As part of the government’s proposal, they intend to expand the Small Brewers Relief (SBR) by introducing news plans that will allow qualifying businesses to claim reduced rates on products below 8.5% ABV. However, they do not intend to offer this relief for products at 8.5% or a higher ABV, which means most wine distributors will not be able to benefit from such relief, leaving many UK SMEs struggling under duty expenses.

“Alcohol has always been an easy target for raising taxes for over a thousand years since the Normans taxed the Barons of England for brewing beer and mead. Well, everything is about to change. From next February, it is proposed that excise duty is levied in the strength of the ABV (alcohol by volume) rather than the traditional fixed rates that have been frozen over the last few years, by volume of liquid and product type. The wine, beer, and spirits trade have been fighting a constant battle for years to keep their much sought-after products at an affordable level. Under the new proposals, the tax will be levied by the strength of the wine in the bottle. This will cause some enormous confusion in the trade.”

“Some examples, duty on sparkling wine will be cut by up to 25%, making a typical bottle of Prosecco 85 pence cheaper. But the reforms will make a typical bottle of Chilean Cabernet Sauvignon 47 pence more expensive. Wines like 19 Crimes with an ABV of 13.5 % will go up by 35 pence.”

“Big Shiraz from Australia and lovely Italian reds like Amarone will rise by over a pound!A Treasury spokesman said, “Leaving the EU has enabled us to reform our outdated alcohol duty system, replacing old rules with a common-sense approach that puts the taxation of stronger beers, wines, and spirits on an equal footing making many wines more affordable for UK drinkers.” After, 40 years’ experience in the wine trade, I’m highly concerned that these changes will do more harm than good and I’m struggling to see how these changes will benefit the industry. We have until February to oppose these changes before they become the law. Watch this space and remember to remain Forever Thirsty.” Charlie Womersley, Director of Forever Thirsty.

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