UK Wine Prices Set to Increase Due to ‘Double Tax Slam’, Warns Trade Association

By | 31 January 2025

Changes to the UK’s duty tax system are set to lead to increased wine prices starting February 2025. The new sliding-scale duty tax, which will apply to many still wines for the first time, is a response to rising inflation, as indicated by the UK’s Wine & Spirit Trade Association (WSTA).

From February 1, consumers could see notable price hikes, with a potential rise of 80 pence on bottles of red wine with an alcohol content of 14.5%. This development follows the recently introduced alcohol duties, which will also see an increase aligned with inflation rates.

The WSTA explained that a new waste packaging recycling fee, as part of the Extended Producer Responsibility measures, is anticipated to commence in April.

The UK government had already made adjustments in August 2023 to the duty system by basing alcohol tax on the strength of the drink. Although still wines with an alcohol by volume (abv) between 11.5% and 14.5% were temporarily taxed as if they were 12.5% abv for an additional 18 months, this provision will shift to a system that includes 30 distinct tax bands.

Under the new structure, for instance, the duty on a 75cl bottle of 14.5% abv still wine is expected to rise by 20%, plus an inflation-related increase. Meanwhile, a bottle of 13.5% abv wine will see a 12% rise, while those at 11.5% abv will actually decrease by about 5%.

Wine industry leaders have voiced concerns about the complexity and the burdensome nature of adjusting to this new system. Hal Wilson, cofounder of Cambridge Wine Merchants, expressed that his business may face what feels like "death by a thousand cuts," needing precise abv information for thousands of wine varieties to ensure accurate pricing.

As the February deadline approaches, some merchants are alerting customers to consider buying wine before the changes take effect. The Wine Society, for example, plans to stabilize prices on its own-label wines, but expects an increase in others starting February 3.

The CEO of The Wine Society, Steve Finlan, remarked that while some price increases are unavoidable, they aim to minimize rises where possible. He illustrated the financial strain on the industry, linking the impending duty hikes to broader economic pressures, such as increases in National Insurance Contributions and business rates.

Related articles

Leave a Reply

Your email address will not be published. Required fields are marked *