UK wines and spirits duty freeze won't deter smugglers

UK wines and spirits duty freeze won't deter smugglers News Wine News
  • Friday 9 March 2001

Smugglers benefitting from the huge differences in French and UK alcohol taxes have had their margins reduced by the latest UK budget - but they won't be deterred, trade associations say.

In his 7 March budget statement, Chancellor (finance minister) Gordon Brown announced a freeze on duty on wines and spirits, pleasing some trade associations but disappointing others.

The UK is still very out-of-step with continental Europe - duty currently stands at £1.16 (US$1.70) on a bottle of wine, compared with £0.02 (US$0.03) on a bottle in France - but the move is welcome.

'We are delighted the Chancellor has recognised the logic of our argument that, whilst the rest of Europe, even the traditionally high-tax Scandinavian countries, is beginning to reduce duty rates, those in the UK have risen inexorably since 1998,' Quentin Rappoport, director of the Wine and Spirit Association, said.

He added that bringing UK duty closer will be a much-needed boost for small businesses, who are steadily losing trade to 'white van' smugglers who buy cheap wines and spirits in France and sell them in Britain.

And Rappoport went on to say that the Chancellor should also have slashed duty on sparkling wine - which stands at £1.65 (US$2.42) a bottle - the main product of many English wineries.

He said, 'We are disappointed that he has not taken the opportunity to reduce the tax discrimination against sparkling wine. This is particularly hard on English wine producers who have no other export market.'

The Scotch Whisky Association said it was 'bitterly disappointed' that whisky was still taxed at a higher level than wine, 'a historic tax anomaly which puts Scotch at a disadvantage,' chief executive Hugh Morison said.

Chris Searle, also of the Wine and Spirit Association, said the tax differences still made it very attractive for gangs to continue smuggling into Britain.

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