England's thriving wine industry is being hampered by one of the highest tariff rates in Europe, an analysis has found.
The UK is one of only two wine-producing countries on the whole continent that imposes a specific tax on the sale of wine.
In Britain, the average bottle charges £2.35. In Italy, Spain, Germany, Portugal and nine other wine-producing countries, there are no fees. The only other country that imposes a duty is France, but at just 3p a bottle, according to the Taxpayers' Alliance.
Only Ireland, which charges £2.77 a bottle, and Finland, which charges £2.98, have higher duty rates than Britain – but none of these countries have a professional wine industry.
In 26 countries examined, The average duty rate was 57p per bottle, meaning the UK duty rate was four times higher.
Wine in Britain is also subject to value-added tax, which is levied at 20 percent after duties are applied. This adds an additional tax of £1.31 to the cost of the average bottle.
Taxes, duties and VAT combined account for 47 percent of the cost of a bottle of wine, but only 29 percent of the cost of beer.
The Taxpayers' Alliance believes the high duty rate is holding back England's wine industry, which produced a record 21 million bottles last year.
Elliot Keck, head of campaigns at the group, said: “Taxpayers will be horrified at how the UK is an outlier among European countries in the way it taxes wine, especially in light of the growing success of our local producers.
“The UK wine industry has gone from strength to strength in recent years, despite facing a tax regime that seems designed to leave it withering on the vine.
“Ministers must remove obstacles to the growth of this dynamic sector and at the very least avoid increasing alcohol duty further.”
Across the 26 countries examined, the average duty rate was 57p per bottle. The UK rate is four times higher
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However, wine duties represent a significant increase in Treasury revenue. In the last tax year, it generated revenues of £4.6bn. To make up for this money, the government has to put a penny on income tax.
However, the drinks industry believes the duty, which increased by 20 per cent on average on wine last year under reforms to link the tax to the strength of the drink, has reached saturation point because any further increases would alienate potential customers and bankrupt them. Less tax revenue.
The latest figures show that in the September-August period, on an annual basis, last summer's duty increases led to a £1.3 billion (10 per cent) reduction in Treasury revenues, in effect negating the savings from the fuel allowance test in the quarter. winter.
The most notable decline was in spirits revenue, which fell by £757 million. Wine duty revenues fell by £238 million, while beer and cider revenues fell by £320 million and £24 million respectively.
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Miles Bell, chief executive of the Wine and Spirits Trade Association, said: “The Prime Minister and Chancellor of the Exchequer have been clear in identifying the need for economic growth and in indicating that pressures on public spending mean that difficult decisions will have to be made.” In the October 30 budget.
“As for the alcohol duty, it should not be a difficult decision. Increasing the duty – which is the government's legacy policy – will only reduce the government's income further at a time when it cannot afford it.”
The ministers called for a freeze on duties for at least two years for the benefit of “the Treasury, British businesses and consumers.”
