English wine threatened by increased duty

23-Oct-2017 - Last updated on 23-Oct-2017 at 12:44 GMT

Too high: tax on the UK wine sector is worrying producers

Related tags Wine Sparkling wine European union Chancellor

English sparkling wine producers may be put under unnecessary pressure if Chancellor of the Exchequer Philip Hammond implements proposals to raise tax on the sector.

Wine producers have aired their concern in a letter to the Government ahead of the Autumn Budget next month, calling for planned hikes to be scrapped.

Among the 12 frustrated Wine & Spirits Trade Association (WSTA) members is the organisation’s chief executive Miles Beale, who claimed English wine has the potential to follow in the footsteps of New Zealand, if the right support is given.

‘Great British success story’

“English wine is a great British success story and we are now producing top quality wines for the home market as well as to export,” said Beale.

“The UK has the potential to follow in the footsteps of New Zealand’s trail-blazing wine success story, yet the industry is being held back by the staggering amount of duty it has to pay. By adding to its already high tax bill this year, the chancellor will hurt the industry’s ability to grow, invest, export and create new jobs.”

Following the freeze in 2015, wine duty income rose by £136m, up by 3.6% on the previous year, according to the WSTA.

In March the chancellor increased wine duty by 3.9%, adding 8p to a bottle of still wine and 10p to a bottle of sparking.

Wine producing countries

This compares with competing wine producing countries, which pay significantly less in wine duty. New Zealand pays half that of the UK, at £1.18 a bottle of still or sparkling wine.

France’s wine industry is heavily supported by theit government, with consumers paying the equivalent of 7p in duty for a bottle of sparkling and 3p for still.

Compared with the whole of the EU, Britain is the highest taxed, with drinkers paying 68% of all wine duties collected by all 28 EU Member States, according to the WSTA.

Producers’ comments:

Sam Linter managing director and head winemaker at Bolney Wine Estate:

“We find it difficult to understand why the chancellor insists on continuing to tax so heavily this great British product.

“We can now proudly say that our wines are competing with some of the best all over the world, and it is disappointing that we are being taxed so heavily at home. We are fully behind the WSTA’s call for the chancellor to freeze wine duty and help the English wine industry continue to grow.”

Mark Driver, founder and owner of Rathfinny Wine Estate with his wife Sarah:

“When two thirds of wine produced in England is sparkling wine and it’s widely perceived as some of the best sparkling wine in the world, it seems illogical that the duty on sparkling wine is 28% higher than still wine.

“In fact it’s the most harshly treated of all alcohol categories. We support the WSTA’s call to freeze wine duty and we’d like to see the government support our growing domestic sparkling wine industry by harmonising the rate of duty between still and sparkling wine.”

“In March the chancellor increased wine duty by 3.9% which added 8p to a bottle of still wine and 10p to sparkling. Yet despite the rise, the Chancellor now plans to increase wine duty again, just eight months after the last one, by 3.4% in the November Budget adding another 7p to still and 9p on sparkling.

“The rapid spread of English vineyards making top quality wine has led experts to comment that the UK is where New Zealand was 30 years ago in the comparative size and the success of its wine industry.

“To have a chance of emulating New Zealand’s successes the English and Welsh wine industry needs its government's backing.”