Wine sellers are warning customers that prices could rise and some bottles disappear from shelves next year if a new tax system comes into effect. Major retailers like Majestic and Cambridge Wine Merchants are preparing their customers for potential impacts. New tax rules are set to be implemented from February 2025 as a result of plans introduced by the previous Conservative government. The wine industry has raised concerns that the changes will complicate the system by introducing over 30 different duty bands.
These changes will affect the duty paid on wines ranging from 11.5% to 14.5% alcohol by volume (ABV), which make up about 80% of the UK market, according to the Wine and Spirit Trade Association (WSTA). For example, a bottle of wine at 14.5% ABV could see duty increase from £2.67 to £3.09. Wine sellers have expressed their inability to shield consumers from price hikes if the policy changes proceed.
In a letter sent to customers, retailers highlighted that the quality and variety of wine available for purchase may be negatively impacted. There is a genuine risk that producers may cease shipping certain wines to the UK due to additional administrative burdens involved in exporting to Britain. Smaller vineyards might find it easier to export elsewhere without extra admin or costs.
Retailers are urging the new Labour Government to reverse the former government’s plans at the upcoming Budget statement. John Colley, chief executive of Majestic, mentioned collaborating with the WSTA to engage with MPs and advocate for urgent change. An 18-month “easement” period has been in place to help businesses adjust to the new system, but that temporary system will end on February 1.
Laithwaites and The Wine Society are also expected to inform their customers about the impending changes. Retailers are hopeful that the Chancellor will address their concerns by reversing the previous government’s decision and supporting small businesses and the industry by extending the wine easement. The Treasury has been contacted for comment on the matter.