Please, Rachel Reeves – the last thing we need is yet another wine tax

Winemaking has been the same for thousands of years, writes Rosamund Hall. It’s not up to HMRC to change it

We are all under staggering pressure at the moment. I don’t know about you, but everytime I do the “big shop”, the amount I spend seems to go up – but the number of goods in my trolley doesn’t.

This, coupled with the constant news about how stressed the public purse is, doesn’t make for an easy time financially (both domestically and nationally). And then there’s the Budget at the end of this month – looming heavy on the horizon like the beastly dark cloud that it is.

Governments love taxing alcohol – some, like ours, more than others. And on the whole I agree with it; I fully understand and support the need to raise necessary revenue to boost our much beleaguered public services. But what I don’t support is the ludicrous change to alcohol duty that is due to come into effect on 1 February 2025. The government needs to scrap it now.

Unfortunately, alcohol duty just isn’t a very “sexy” topic to chat about, and I think a lot of us switch off when we hear it mentioned – but please, bear with me on this.

We have already had a significant increase in alcohol duty which came into effect in August 2023, where most wines (those between 11.5-14.5 per cent ABV) saw an increase of 44p on a 75cl bottle of wine – equivalent to a 20 per cent increase in the duty paid (£2.67 versus the old £2.23). Fortified wines, such as port or sherry with alcohol levels above 15 per cent ABV, had a whopping duty increase of 97p (up 44 per cent). And the Office for Budget Responsibility has forecast that alcohol duties will raise £12.7bn in 2024/25; equivalent to 0.5 per cent of national income.

Alcohol is already doing a lot of heavy lifting for the Treasury.

But what is set to change this coming February? The previous government, in addition to increasing duty across the board, also introduced a new system that would add many layers to the duty you pay on a bottle of wine, based on its final alcoholic strength (ABV or alcohol by volume). So this means that all wines would pay a set amount based on the percentage you see on the bottle, thus meaning a wine with an ABV of 14 per cent would be taxed higher than that of a 12 per cent ABV, and every 0.1 per cent increment in between.

In summary, there would be 30 possible taxation bands for wine. THIRTY!

However, Rishi Sunak’s government conceded that this was rather complicated, so granted an easement period until 1 February 2025 to allow for importers and retailers to start to address the logistical nightmare that they had created. This meant that all wines between 11.5-14.5 per cent ABV were charged a flat rate of £2.67 (the price of a 12.5 per cent wine under the proposed new system) – which makes sense as 85 per cent of all wines sold in this country fall into this category.

You must have noticed that the cost of your favourite wine has increased? The costs associated with wine production are rocketing: importing logistics due to Brexit, soaring energy prices, the cost of glass, production costs due to unpredictable weather, increased labour costs, the list really can go on… and now this.

This new system will add yet another layer of intricate bureaucracy that just isn’t needed.

Wine and Spirit Trade Association (WSTA) chief executive, Miles Beale, said: “By avoiding imposing damaging additional costs and red tape through maintaining the wine easement ... businesses and consumers will benefit. There is still time to help boost British businesses in a potential-packed sector by maintaining the wine easement and freezing alcohol duty. It won’t cost the government anything, but it will support British business by promoting conditions for growth and protect British consumers by keeping prices stable.”

If it goes ahead, the reality will be more expensive wine and a strong likelihood that choice will decrease.

Wine isn’t a highly manipulated product; it’s not like making a can of commercial lager or cider. None of this takes into account the nuance of wine – the fact that it’s made once a year, from grapes that are at the mercy of huge climatic pressures, and naturally vary in alcohol levels.

It’s been suggested that you can just manipulate the wine to reduce the alcohol – but I assure you, this will impact not only the taste, but the quality too. The principles used to produce wine have not changed for thousands of years, and it certainly shouldn’t be up to HMRC to try and impact such change now.

So, Rachel Reeves, my plea to you is to hold tight with the status quo and continue the easement – and see the positive results such a decision can bring...

Rosamund Hall (DipWSET) is a freelance writer, presenter and columnist specialising in wine and spirits as well as lifestyle, travel and parenting. Her work appears regularly in The Independent