WineGB has joined the throng of trade bodies, retailers and suppliers highlighting the detrimental impact of duty rises taken last year on Treasury receipts and industry growth.
Speaking as the new Labour government gears up for its first budget at the end of October, WineGB said high duty rates were “acting as a lag” to growth and creating a competitive disadvantage for British winemakers.
It echoed calls from industry figures, including Majestic Wines CEO John Colley and WSTA boss Miles Beale, for the government to reconsider the ending of temporary easement for wine duty, and said last August’s increase had caused revenue from wine duty to the Treasury to fall by £238m.
Colley has called the post-Brexit alcohol duty system, which sees alcoholic drinks taxed according to their strength to the nearest 0.1% abv, “unworkable” for wine. The WSTA, meanwhile, has said 43% of wines will see an increase in their tax burden when the easement ends.
“Duty increases introduced in August 2023 were the largest in almost half a century and the proposed abv brands for duty calculation – due to be enforced next year – disproportionately target wine,” said WineGB, adding a duty cut would “stimulate sales of premium English and Welsh wines and… deliver a knock-on increase in Treasury revenue”.
The trade association also pointed out the UK was “one of the few wine-producing countries in Europe” to levy excise on home-grown wines.
With 10 European countries not applying excise duty on domestically produced sparkling wines, and 15 countries having no excise duty on home-grown still wines, British wines did not have a “level playing field” on which they could compete domestically and internationally, WineGB said.
Listing further demands for government consideration, WineGB said reforms to cellar door relief, to provide full relief on a set number of bottles sold directly from premises, could “encourage further investment in tourism facilities and infrastructure”.
Small producer relief, meanwhile, ought to have alcohol-specific thresholds rather only applying to products with less than 8.5% abv, in order to reflect the higher capital and harvesting costs faced by winemakers relative to brewers and cidermakers, it said.
“With two weeks to go until the budget announcement, we want to support the Chancellor achieve her economic growth plans,” said Nicola Bates, WineGB CEO. “By cutting duty, introducing cellar door relief, and reforming small producer relief, she can accelerate our growth.”
She added: “Duty rates are acting as a lag to the level of growth we can have and a cut to overall duty, or reliefs, would provide considerable reassurance for our businesses and enable them to invest and grow.”
No comments yet