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Budget ‘nothing to celebrate’ for wine trade

UK Chancellor Gordon Brown has again targeted the wine trade with a 4p tax hike on a bottle of wine prompting many in the trade to rail against his 2005 budget.

The increase will come into effect this Sunday along with a 1p rise on beer. Sparkling wines and spirits have been left untouched.

‘Sadly we have nothing to celebrate in this Budget,’ said Adrian McKeon, managing director of Allied Domecq Wines UK.

This is the third successive year to see duty on wine raised by 4p.

‘Once again, the Chancellor is masking the blow dealt to the wine industry behind the seemingly innocuous face of an inflationary rise of 4p on a bottle of wine,’ said the director of the Wine and Spirit Association, Quentin Rappoport.

Rappoport added that despite the relatively small size of the increase, continuous tax rises, ‘have an impact on the growth of the wine sector.’

So far, the burden of absorbing the tax on wine has fallen to the trade. McKeon has now called for the consumer to cover some of the cost.

‘Excise is a consumer tax, and should be treated as such by the trade,’ he said. ‘Producers’ margins are being squeezed ever-tighter due to the stranglehold of price points. Furthermore, the administrative burden of the tax rise is huge for producers and retailers alike, so it’s in both our interests that the consumer pays rather than the trade taking the hit once again.’

McKeon also called for an end to the ‘totally unjustifiable’ surcharge on sparkling wines.

Written by Oliver Styles

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