WSTA explores tax band for low alcohol wines

The Wine and Spirit Trade Association hopes to work with the UK government to introduce a separate tax band for low alcohol wines.

Speaking at the WSTA conference, chief executive Jeremy Beadles said the organisation was keen to work on “opportunities for a new wine tax band between 5.5% and 8% abv.”

The revelation followed Beadles’ dismissal of the idea that the UK government might be persuaded to abandon the current duty escalator before 2014, “unless there is a dramatic change in circumstances.”

Beadles acknowledged: “You only really make progress when businesses understand something is a commercial opportunity, not just a PR opportunity.”

However, he observed: “I can see significant commercial opportunities from low alcohol,” citing the lower Common Customs Tariff that applies to wines with an abv of 5.5% or below.

Simon McMurtrie, chief executive of Direct Wines, lent his support to the idea during a Q&A session chaired by BBC business presenter Dominic Laurie.

“There is big demand in Asia for low alcohol wines,” observed McMurtrie, adding: “The size and speed of growth will dictate availability. A lower tax band in the UK would give real growth to that sector.”

Linking the support for low alcohol wines to the government’s Public Health Responsibility Deal, Beadles praised the step announced in March by Heineken UK to remove 100 million alcohol units from the UK market by reducing the strength of one of its major brands.

“That’s not selling less product,” he emphasised, “that’s selling a product with fewer alcohol units.”