When Britain elected a new government earlier this year, it was generally acknowledged that the economy was in an unhealthy state. The prisons were so full that inmates had to be allowed out early, the health service was said to be on the verge of collapse, and school roofs were in danger of collapsing.
So, a harsh budget was not unexpected. The new Chancellor, Rachel Reeves – the first woman to hold this role – announced that she needed to find £40bn ($52bn), and one of the places she is planning to find a small part of this is in taxing alcohol.
The UK already had one of the highest rates of excise duty in the world, a situation made worse by the previous administration having hiked it still further. Another legacy it left was a highly complex plan to alter the excise duty model to align it with alcoholic strength. This was due to come into force on February 1, 2025, but, in view of the level of protest from British wine professionals about the basic impracticality of working with 0.5% increments, it was hoped that the plan would be scrapped or, at the very least, radically simplified.
This has not happened. So, as Britons who have practised Dry January go out to buy their first bottle or glass of wine since New Year’s Day, they will find that its price has risen significantly – unless they favour lower-strength examples.
Any wine with an ABV of 12.5% will carry the same £2.67 duty as at present. Lower-strength wines will cost less, but the rise in tax on wines with 13% ABV or more will be significant. So, when 20% VAT sales tax is included, a red at 14.5% will cost £0.52 more next year. These figures will rise even further in order to keep in line with inflation.
Bordeaux-based British winemaker, Gavin Quinney has been tracking these duty changes closely, and has published charts showing that a 13% wine on sale in Britain will carry more tax than any nation in the EU.
The implications of this move are already being felt, and several importers are looking to introduce ‘mid-strength’ wines of 7-11%, in order to take advantage of the lower duty rates. These will either be sweet and/or partly dealcoholized. The 8%-or-lower figure, may prove popular among producers following a change in the law in Finland where wines with this ABV can now be sold outside the monopoly stores.
When Britain is submerged beneath a flood of non-PDO, ≤10%, Pinot Grigio, what this will do for its reputation as a ‘serious’ wine nation, however, is another matter.
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