Some of the UK's biggest wine retailers are bracing their customers for higher prices due to changes to the way wine is taxed from February next year.
Majestic, Laithwaites, The Wine Society and Cambridge Wine Merchants are among the wine companies that have launched a poster campaign and will contact their customer base to warn of future price rises.
Excise duties on all wines between 11.5% ABV and 14.5% ABV are currently the same amount and are calculated according to a simple easing introduced as part of Rishi Sunak's new duty regime last year.
However, the easement is due to be removed when the single amount of duty paid on wines between 11.5-14.5% ABV – £2.67 – is replaced by up to 30 different amounts payable depending on the strength of the wine. For a bottle of 14.5% ABV wine, this will see the wine duty increase from £2.67 per bottle to £3.09.
Wine companies, along with the Wine and Spirit Trade Association (WSTA), have been campaigning for more than a year to make the temporary easement permanent, which they claim will avoid the costs of red tape, help businesses grow, and keep prices low for consumers. And achieving stability in treasury income.
However, the new government has so far given no indication that it will retain the facility permanently, prompting retailers to send messages to customers that some wines may disappear from shelves and prices will rise.
In an email sent to Majestic and Cambridge Wine Merchants last week, the companies warned: “At the time they launched the policy, the Treasury had a stated aim of creating a fee regime that was simpler and fairer for wine businesses like ours to administer.” . However, as an industry, we firmly believe that the system to be introduced fails on both counts – it is more complex and will be much more expensive. Companies like ours will need to invest six-figure sums just to develop the systems required to handle the new approach, with ongoing administrative costs potentially reaching similar amounts on an annual basis.
He goes on to say: “Today, wine is the most popular alcoholic drink in the UK. As a nation, we are the second largest importer of wine in the world, and support a variety of styles from around the world. However, the Treasury's insistence on going ahead with these changes from 1 February 2025 will threaten both of these positions.
“More concerning for you as discerning wine drinkers, is that the quality and choice of wines available for you to purchase are likely to be adversely affected. There is a real risk that the producers of your favorite wines will stop shipping them to the UK entirely, due to the additional administrative burden that It will involve exporting wine to Britain Small, family-run vineyards producing great wines are unlikely to change operations that have been in place for generations to suit only the UK market, when they can easily export their wines elsewhere in the world without additional management or cost. .
“We have fought hard to avoid any of these unwanted consequences, and have liaised with Treasury officials, along with the Wine and Spirits Trade Association (WSTA), to push for urgent change. But with less than four months to go, this policy has been changed.” We now feel obligated to tell you, our loyal customers, that these changes are coming. Whether your favorite wines rise in price, or disappear from shelves completely next year, we, as an industry, will be powerless to protect you from it.
Miles Bell, chief executive of the WSTA, commented: “We are seeing a grim warning from wine retailers who are very concerned about the impact of unnecessary and costly red tape that is set to come into force next year. They feel it is right that their customers know that further Prices are coming – thanks to direct government policy This can still be avoided if the new government puts an end to Rishi Sunak's decision to impose a huge bureaucratic burden on the UK wine industry.
“The new Prime Minister and the Chancellor have been clear in outlining the need for economic growth and in pointing out that pressures on public spending mean that difficult budget decisions will have to be made on October 30. Removing wine easements would do just the opposite – and without It brings any benefit to public finances.
“Instead – by avoiding the imposition of harmful additional costs and bureaucratic red tape by maintaining wine easements – businesses and consumers will benefit. There is still time to help boost British businesses in a sector overflowing with potential by preserving wine easements and freezing royalties.” Alcohol will not cost the government anything, but it will support British companies by enhancing growth conditions and protect British consumers by keeping prices stable.
John Colley, CEO of Majestic, added: “The previous government had intended to create an alcohol duty system that would be simpler, fairer and less bureaucratic for businesses to administer, but it failed on every measure. The proposed change to go from one business band to 30 different bands based on ABV would Bad for consumers, retailers and hospitality operators.
“With less than three months until the wine easement expires, we now feel compelled to warn our customer base of the confusion this may cause them at the edge of the shelf, and the potential impact on our offering at Majestic.
“But this is not just about Majestic. Removing the wine easement would disproportionately hit small businesses – including the 900 independent wine merchants operating across the UK and many importers who deal with international wine trade. This would restrict Growth and threatens people's livelihoods at a time when we must do everything we can to support our high streets.
“In collaboration with the Wine and Spirits Trade Association (WSTA), Majestic has engaged with MPs and Treasury officials on behalf of the industry to explain the stark impact this Conservative policy will have on our industry. We hope to see evidence on 30 October that the Chancellor has addressed our concerns by reversing the decision The previous government, helping small businesses and industry by expanding wine easements.
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