The UK's wine sector has warned against increasing prices from February 2025 due to the implementation of new tax regulations. Changes include expanding the gradient tax system based on alcohol content, as well as modifying duties in line with inflation – the scrutiny that, according to the Wine & Spirit Trade (WSTA) association, will directly affect consumers.
The new system, which was introduced in August 2023, has so far allowed alcohol with alcohol content between 11.5 % and 14.5 % to be imposed on it as if it had 12.5 %. However, starting from February 1, 2025, this temporary measure will end and be replaced by 30 distinct tax divisions. According to WSTA estimates, the fees on a bottle of red wine with alcohol will increase by 14.5 % by 20 %, adding 54 People to its cost, while the 13.5 % bottle will witness an increase of 12 %. On the contrary, low alcohol wine, such as those of 11.5 %, will witness a tax reduction of about 5 %.
In addition to the high fees, the new packaging recycling fees is expected to become the system of the product that extends into force in April, which increases the final price of some bottles.
The wine industry has expressed its concerns about the complexity of the new system, especially for retailers dealing with a large number of products. Business owners have warned that they will need to determine the alcohol content for each wine accurately to calculate its final price. Some retailers have already started informing customers of the changes, providing the option to buy or launch stored bottles before the new rates become valid.
WSTA highlighted that these increases add other financial pressure on companies, such as high national insurance contributions and high commercial taxes, which exacerbates the challenges of the sector. Meanwhile, health defenders supported tax reform, on the pretext that it encourages the consumption of low alcohol drinks.
