Budget: tax on sparkling angers wine lobby

Today’s Budget tax hikes on sparkling and still wine may mean reduced choice for the consumer, the UK wine lobby says.

Tax on sparkling wine in the UK will increase by £0.07 per bottle – a decision which has ‘shocked and disappointed’ the UK wine and spirits lobby.

In today’s spring Budget, Chancellor of the Exchequer Gordon Brown also announced duty increases of £0.05 on a bottle of wine, £0.01 on a pint of beer and a litre of cider – and a freeze on duty on spirits.

While the Wine and Spirit Trade Association (WSTA) welcomed the freeze on spirits it slammed the hike in sparkling duty.

‘We are shocked and disappointed by the Chancellor’s decision…Sparkling wine already suffers from a higher tax rate than still wine, but in previous years the Chancellor has seemed determined to get rid of this anomaly,’ WSTA chief Jeremy Beadles said.

He added that the ‘U turn’ would have a ‘serious impact’ on the English and Welsh wine market, of which 15% is sparkling.

‘This duty hike will deal a real blow to this domestic industry.’

Beadles also said the WSTA was disappointed the Chancellor had not heeded the association’s calls to freeze duty on still wine.

Although wine is a growth category in the UK, figures for 2006 showed a slowing in wine sales, Beadles said.

‘Combining high taxes with increasing costs means that the UK wine sector risks becoming an unattractive market to suppliers, resulting in reduced choice and quality for the consumer.’

A WSTA delegation consisting of Christopher Carson of Constellation Europe, Tim How of Majestic, Adrian McKeon of Beam Global, and Jeremy Beadles, submitted its Budget proposals to the Chancellor in early 2007.

Written by Adam Lechmere