The UK wine industry is preparing for significant challenges due to imminent changes in the alcohol duty regime, effective from 1 February 2025.
- A new tax system will introduce over 30 different tax bands, complicating the current structure significantly.
- Key industry players, including The Wine Society, are voicing concerns over potential price increases for consumers and the threat to certain wine products.
- Wines with an alcohol content between 11.5% and 14.5% ABV, making up 80% of the UK market, are expected to be particularly affected.
- Efforts are underway by wine retailers to lobby against these changes, fearing potential impacts on consumer choice and market growth.
The UK wine industry is on the brink of transformation as the government prepares to overhaul the alcohol duty system. This new regime, slated to take effect on 1 February 2025, will introduce over 30 different tax bands, a shift from the current framework that raises complexity and financial strain for both retailers and consumers. Steve Finlan, CEO of The Wine Society, has expressed concerns that consumers will face price hikes, potentially leading to the removal of some wines from the market. Finlan remarks, “The new duty system will have an impact on pricing across our industry and will result in higher costs for the UK’s wine consumers.”
According to the Wine and Spirit Trade Association (WSTA), wines with alcohol content ranging from 11.5% to 14.5% ABV are set to be impacted the most, as they represent approximately 80% of the UK market. Under the proposed duty changes, the duty on a bottle of wine at 14.5% ABV could rise from £2.67 to £3.09, which may deter consumer purchasing power. The impending changes have galvanized industry leaders who fear that increased costs could suppress consumer spending and reduce government tax revenues as a result.
John Colley, CEO of Majestic, has warned that this duty hike risks stifling growth and jeopardizing jobs, at a time when economic recovery is crucial. He emphasised that innovation and support for high streets should be a priority, rather than new fiscal burdens. Industry stakeholders are actively lobbying the government, seeking to prevent these duty increases. Numerous retailers, including Majestic and Cambridge Wine Merchants, have communicated with their customers, urging them to engage their MPs to oppose the changes, highlighting the potential negative effects on wine quality and selection available in the UK.
This lobbying effort underscores a profound concern within the wine trade that administrative hurdles could dissuade international producers from shipping their wines to the UK market altogether. With the new regulations in sight, there is a pressing call from the industry for reform before entrenched policies threaten to disrupt the sector substantively.
The proposed alcohol duty changes present significant obstacles for the UK wine industry, with ongoing efforts to mitigate their impact.
