Changes to duty tax mean UK consumers face the prospect of higher wine prices on some bottles from February 2025, leading trade members have advised.
A sliding-scale duty tax system based on alcoholic strength will be extended to many still wines for the first time on 1 February, and alcohol duties will also rise in-line with inflation, said the UK’s Wine & Spirit Trade Association (WSTA).
It added that new waste packaging recycling fees that are part of Extended Producer Responsibility measures are expected in April.
This ‘double tax slam’ could push up the price of a bottle of 14.5% abv red wine by 80 pence, it said.
‘UK businesses are warning customers that they cannot absorb another round of tax increases and so consumers should expect to pay a higher price for their favourite tipple.’
New duty rules for still wines in February 2025
The UK government implemented a new system broadly calculating alcohol duty based on a drink’s strength in August 2023, although a ‘temporary easement’ allowed still wines between 11.5% and 14.5% alcohol by volume (abv) to be taxed as if 12.5% abv for another 18 months.
In February 2025, this single levy will be replaced by 30 different tax bands, according to the WSTA.
Duty on a 14.5% abv still wine will increase by 20%, or 54 pence, if duty tax increases in-line with inflation are also included, the WSTA said
Duty on a 13.5% abv still wine will rise by 12%, but duty on an 11.5% abv wine will drop by around 5%, showed WSTA modelling in late 2024.
Duty is less on lower-strength alcoholic drinks under the new system, and some health campaigners have welcomed the alcohol duty reforms.
‘Death by a thousand cuts’
Wine trade leaders have warned of the burden of managing the new system. ‘In my business this feels like death by a thousand cuts, or even two thousand cuts,’ said Hal Wilson, cofounder of Cambridge Wine Merchants.
‘We sell over 2,000 different wines each year and from February will need to know the precise abv of each and every one before being able to calculate their full cost.’
Some merchants have sent alerts to customers in recent days about the upcoming changes, in case they wish to buy bottles or release cases from in-bond storage prior to the deadline.
Retailer The Wine Society informed members in January that it will hold prices on own-label wines, but that other wines are set to increase from 3 February.
Its CEO, Steve Finlan, told Decanter in December that the retailer’s member-based model had helped it to hold the vast majority of wine prices since May 2023, despite ‘unprecedented pressure’ on prices.
‘The new increases will inevitably lead to some price rises, although we will aim to hold as many as we can in 2025.’
He also added, ‘A complete absence of joined-up thinking means that duty must be added to the increase in National Insurance Contributions, the rise in business rates and the introduction of Extended Producer Responsibility. It is a tsunami of costs that just continue governments’ assault on the wine industry.’
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The post Wine prices to rise in UK ‘double tax slam’, says trade appeared first on Decanter.
Source : https://www.decanter.com/wine-news/wine-prices-to-rise-in-uk-double-tax-slam-says-trade-549692/
