Wine duty will be almost half the cost of a bottle of wine

By Nikkie Sutton

- Last updated on GMT

Booze duty: £2.23 of a bottle of wine will be tax
Booze duty: £2.23 of a bottle of wine will be tax
The inflationary rise in wine tax announced at the Autumn Budget (29 October) means £2.23 of a £5 bottle of wine will be the duty pricing alone, according to research from wine supplier Bibendum.

Chancellor Philip Hammond announced a beer, cider and spirits duty freeze but said wine tax would rise in line with inflation.

Wine & Spirits Trade Association chief executive Miles Beale said: “The decision by the Chancellor to increase wine rates significantly is a hammer blow to this great British industry.

“It actively undermines a sector that has been hardest hit since the Brexit referendum and will be thorough unwelcome for the 33m consumers of the nation’s most popular alcoholic drink."

Grossly unfair

He added: “This inflationary rise is grossly unfair, unjustified and counter-productive. The UK is the world’s biggest wine trading nation and as such, deserves Government support, not punishment.

“The wine industry is, unfortunately, no stranger to harsh treatment from Chancellors. Since 2012, wine overtook beer as the largest contributor to the public purse through duty payments and no alcoholic drink has paid more to the Treasury since then.

“[The duty] announcement means that only twice since 2003 that Chancellors from either party have showed their support to an industry employing 190,000 people across the country.”

Bibendum said with the recent Budget announcement, wine duty will rise with inflation on 1 February 2019 to £2.23 per bottle.

Rise with inflation

Wine pricing

It added that considering the average retail price of £5.39 per bottle of wine in the UK, only 53p pays for the wine itself.

This is significantly less than the £2.70 worth of wine consumers get with a £10 bottle or the £7.03 with a £20 bottle.

With a £5 bottle of wine, excise duty is £2.23, VAT is 83p, packaging is 36p, logistics costs 20p, which leaves a 30p cost for the wine and a total margin of £1.08.

However, Bibendum points out that while a £20 bottle of wine is four times the cost of a £5 bottle, the quality of the drink increases by 23 times.

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