UK chancellor George Osborne has left the wine trade 'deeply disappointed' by announcing that wine duty tax will rise with inflation – whilst beer, cider and spirits levies will be frozen.
UK Budget 2016 – wine trade reaction
Wine was the only alcoholic drink not to benefit from a freeze in duty in Osborne’s Budget speech to Parliament today (16 March).
- Scroll down to see how much of the price a bottle of wine goes on tax.
Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA), said ‘We are disappointed that 30m wine consumers have been singled out for a duty rise.’
In last year’s pre-election budget, Osborne appeased wine drinkers with a freeze on duty – but wine still fared the worst, because beer and spirit duties were cut.
Osborne’s announcement may put more financial pressure on the wine supply chain, particularly at a time when the sterling currency has weakened against the euro, effectively making it more expensive to import wine from the eurozone countries such as France, Spain and Italy.
‘The freeze in wine duty in 2015 has resulted in £118m extra in revenue to the UK Treasury in the last 10 months, up 4% [on the previous year], which makes it very unfair that wine has been penalised,’ said Beale.
‘We also deeply regret that the Government has missed this important opportunity to support the emerging English wine industry, which is a real home-grown success story that needs nurturing rather than being hit by another unfair tax increase.’
Land under vine in the UK has more than doubled in the past seven years.
Michael Saunders, CEO of Bibendum PLB, said ‘I am delighted that beer, cider and spirits have escaped increases, but it is unfair that wine drinkers are being penalised yet again. Why? Because all wine is imported? Well, that’s no longer the case.’
‘Our industry has made great strides to promote the benefits of what we do. Today’s news highlights that we must do more.’
Some were more positive about the news though. A spokeperson for Enotria & Coe said ‘It is great that the current government has recognised and supported this positive agenda through duty freeze and limited increases on wine.’
UK wine duty
Wine duty in the UK is the second highest in the EU, and wine has not had a tax cut in the country since 1984, said the WSTA.
Privately, several wine trade leaders had not expected a cut this time around, but many will be annoyed that wine was the only drink not to see tax frozen.
With £2.05 for every bottle of wine going on excise duty, a recent poll by YouGov – and commissioned by the WSTA – showed that 57% of people think that the tax on wine is too high.