A Sense of Duty

March 06, 2025

I wrote to my MP recently.

“Why did you do that, Chris”

“Call it my sense of duty. Let me put you in the picture.”

October 2021 and Rishi Sunak leaps to his feet to deliver a budget which spells a nightmare to the wine and hospitality trades. Since the beginning of time it seems, certainly for as long as I have worked in the industry, wine has been taxed at effectively a flat rate, regardless of its price or alcoholic strength. Rishi determined to simplify this arrangement (“we are taking advantage of leaving the EU by announcing the most radical simplification of alcohol duties for over 140 years”) by replacing 1 excise band for all wine between 8.5% and 15% with multiple bands rising incrementally for every .5% of alcohol. The one saving grace at the time was that there was at least some recognition of the chaos being unleashed as they gave us until February 2025 to get our ducks in a row.

“So? Beers and Spirits are taxed according to their strength, why not wine?”

Because it fundamentally misunderstands the different production processes involved. Control of alcohol levels is part and parcel of the brewing and distilling process, winemakers are, largely, at the mercy of the weather and their priority is to produce the best that they can with the alcohol, fruit, acidity, tannins and natural sugars working in harmony to create something that is not just balanced and interesting but which is a reflection of the region, the grape varieties involved and all the other factors at play in the winery. Whilst alcohol levels are part and parcel of the finished product, no-one is going to get hung up about the odd 1% here or there so long as the wine is in harmony.

But that’s far from the end of the issue. Now I’m as fond of a spreadsheet as the next geezer but there’s still a part of me that hangs onto the quaint notion that the role of a wine trade professional might actually involve, just occasionally, getting up close and personal with some er….wine. But sadly that remains a distant memory as every new shipment requires checking and double checking to ensure it’s correctly declared bearing in mind that whatever information might have come through from the winery may not actually coincide with what is on the label. Hilariously, many smaller wineries may still be using labels left from previous vintages and there’s absolutely no guarantee that whatever the abv may have been in tank will be the same post bottling. When I order a mixed shipment from a supplier – maybe 15 wines on a couple of pallets – that’s potentially 15 different duty levels and every likelihood that they will have changed by the time I ship the next vintage.

This may not seem particularly arduous but the reality is that it is so unnecessary. Major importers with 2,000+ skus on their lists will be forever checking prices as new vintages arrive, millions have been spent on updating computer software across the industry and within HMRC, it won’t raise any more revenue for the government and is hardly in line with the new administration’s promise to “drive down the burden on business.” Europeans think we’re mad (no change there then) and have no intention of implementing any changes to accommodate us but we can at least rest easy in the knowledge that Rishi has simplified things for us. Oh, and next time you’re opening a £9.00 bottle you can reflect on the fact that 50% of that sum is tax.

 

Chris Connolly

 

*The WSTA (Wine & Spirits Trade Association) has put together a table modelling the duty rates per bottle, excluding the VAT (yes, you do pay a tax on tax). In brief, every 0.5% increase in alcohol increases duty by a little more than 12p per bottle, and a 14.5% (think big Malbec or Rioja) is now charged over 50p more duty (ex vat) than a 12.5% (Beaujolais or Chilean house wine). Also, just a final aside, this means the duty for a 14.5% bottle has now increase by 98p (ex vat of course) in the last 18 months...

% ABV	Duty pre February (75cl)	New Duty 1/2/25	Difference
11.0	£2.35	£2.43	+8p
11.5	£2.67	£2.54	-13p
12.0	£2.67	£2.65	-2p
12.5	£2.67	£2.76	+9p
13.0	£2.67	£2.88	+21p
13.5	£2.67	£2.99	+32p
14.0	£2.67	£3.10	+43p
14.5	£2.67	£3.21	+54p
15.0	£3.20	£3.32	+12p

 

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