Four of the UK’s biggest wine sellers have said that upcoming changes to alcohol duty will lead to price rises in a “bleak” warning to their customers.
Majestic, Laithwaites, The Wine Society and Cambridge Wine Merchants are amongst the wine businesses who together launched a poster campaign against changes to the excise duty.
Excise Duty on all wines between 11.5 per cent abv and 14.5 per cent abv (alcohol by volume) is set to rise. The change was introduced as part of Rishi Sunak’s new duty system last year but was postponed until next February.
The single amount of duty paid on wines between 11.5-14.5 per cent abv – £2.67 – is set to be replaced with a scaleable system whereby stronger wines are taxed more. For a bottle of wine at 14.5 per cent abv, this will see wine duty increase from £2.67 a bottle to £3.09.
Wine businesses, along with the Wine and Spirit Trade Association, have been campaigning for over a year calling for the temporary easement to be made permanent. They have argued it will “avoid red tape costs and instead help businesses grow, keep prices down for consumers and stabilise Treasury income”.
In an email sent to Majestic and Cambridge Wine Merchants customers on 4 October, the businesses warned: “At the time they launched the policy, the Treasury had a stated aim to create a duty system that would be simpler and fairer for wine businesses like ours to administer.
“Yet, as an industry, we firmly believe the system that is set to be introduced fails on both counts – it is more complex and will be much more costly. Businesses like ours will need to invest six-figure sums just to develop the systems required to handle the new approach, with ongoing administrative costs likely to run into similar sums on an annual basis.”
The retailers also warned that the quality and choice of wine available to purchase would decrease.
“There is a genuine risk that some [producers] will stop shipping [wine] to the UK entirely, due to the additional administrative burden that will be involved in exporting wine to Britain,” the retailers said.
Steve Finlan, CEO of The Wine Society, the UK’s largest co-operative wine retailer, said: “If the new government is serious about listening to business then they must recognise an entire industry united against the proposed new duty regime”.
Last year saw the largest alcohol tax hike for 50 years, which came into force in August 2023 and increased the duty for spirits and beer by 10 per cent, and 20 per cent for most wines.
An HM Treasury spokesperson said: “We do not comment on speculation around tax changes outside of fiscal events.”
The hospitality industry is still struggling
The end of the wine easement is one of many administrative and tax burdens on the hospitality industry, which has been struggling for years under the cost-of-living crisis.
This morning, 7 October, over 70 retail bosses urged the Chancellor to slash business rates for retailers in a move which they claimed would boost growth and fuel investment.
In a letter to Rachel Reeves, 71 retail chief executives argued the government should “level the playing field” by introducing a ‘retail rates corrector’, which would see rates paid on retail properties fall by 20 per cent.
She called on the Chancellor to use her Autumn Budget to act, adding that “the last thing pubs need is an average business rates hike of £12,160 next year through inflationary rises and the loss of the discount.”
Earlier this year, a Centre for Policy Studies (CPS) found that the regulatory burden placed on businesses rose by £6bn a year under the last conservative government.
Some 41 per cent of firms said they were troubled by regulatory requirements in April, the highest level in nearly four years.
The new Government has a strong focus on regulation, although details on its policies will remain unclear until the Autumn budget at the end of October.
