The UK’s wine industry is facing potential upheaval as the government prepares to implement substantial changes to alcohol duty from 1 February 2025. This overhaul will introduce over 30 distinct tax bands, complicating the existing framework significantly.
Steve Finlan, CEO of the Wine Society, has voiced concerns that these new tax regulations will lead to price hikes for consumers, possibly resulting in some wines being removed from UK shelves. The Wine Society, representing 180,000 members, is among several industry groups expressing criticism towards the government’s approach.
Other influential figures in the wine sector, including Majestic Wine and Laithwaites, have echoed these concerns. According to the Wine and Spirit Trade Association (WSTA), the changes will disproportionately affect wines with an alcohol content of between 11.5% and 14.5% ABV, which make up approximately 80% of the UK market. Duty on a bottle of wine at 14.5% ABV could increase from £2.67 to £3.09 under the new system.
Finlan highlighted to the Daily Mail, ‘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.’ The underlying fear among industry leaders is that escalating prices could reduce consumer spending, thereby potentially lowering tax revenues for the government.
John Colley, CEO of Majestic, warned that the price rise ‘will restrict growth and threaten people’s livelihoods at a time when we should be doing everything we can to support our high streets.’
In response, wine retailers are lobbying for governmental intervention to halt the duty increase, urging reforms before detrimental effects take hold. Majestic and Cambridge Wine Merchants have reached out to customers, encouraging them to contact their MPs to oppose the changes. These communications stress a genuine risk that beloved wine producers may cease shipments to the UK due to the increased administrative burden.
The impending revisions to the UK’s alcohol duty system signal significant challenges for the wine industry, with potential repercussions on pricing, availability, and consumer choice. Stakeholders continue to seek solutions to avert these outcomes.
