Wine trade figures join calls to cut duty

UK winemakers, independent retailers and TV personalities have lent their support to the campaign calling on the Chancellor to cut alcohol duty.

Miles Beale, Chief Executive, Wine and Spirit Trade Association (left) and David Frost, Chief Executive, Scotch Whisky Association (right) launching the ‘Drop the Duty!’ campaign calling for a 2% cut in alcohol duty

Under the “Drop the Duty” banner – led by the Wine and Spirit Trade Association alongside the Scotch Whisky Association and the Taxpayers’ Alliance – the campaigners have pointed to independent research showing that a 2% cut in duty on wine in the UK would create an additional 10,000 jobs across the country.

This cut would increase the contribution to the public finances by £1.1 billion in 2015 through increased growth in the industry, according to the research carried out by EY, which would “enable the Chancellor to reduce the deficit faster”.

Frazer Thompson, chief executive of leading English wine producer Chapel Down, said, “We produced about a million bottles of still and sparkling wine last year, we are a significant employer and investor in Kent, and are making an ever growing and valuable economic contribution to the UK economy.

“Yet the current level of duty and tax we contribute to the exchequer – up to 45% per bottle in our case but 60% of the average priced bottle of wine in the UK– is out of all proportion to other EU countries. It is a significant limitation to our speed of growth and a dampener on investment that reduces the amount of money we can spend in expanding our facilities and employing more people.”

The UK is increasing its presence in the international winemaking industry. A total of 26 medals were awarded to homegrown wines at Tranche One of the International Wine Challenge 2015, with three English sparkling wines from Sussex receiving Gold medals and English still wines being awarded three Silver and nine Bronze medals.

Peter Richards MW has added his voice to the “Drop the Duty” campaign

Highlighting this fact, Peter Richards MW, wine expert and regular of BBC’s Saturday Kitchen, said, “This is a really exciting time for wine producers in the UK. The wine business is making a significant contribution to our economy; we have the sixth largest wine market in the world, and we have some brilliant winemakers making world-beating vintages.

He continued, “Such a punitive tax regime is limiting our ability to enjoy the fantastic wines that this country has to offer. It also acts as a brake on jobs, earnings and tax revenue from a growth sector in our local economy.

“A 2% drop in alcohol duty would be well-deserved boost for a home-grown success story already brimming with potential.”

Independent retailers and merchants are also adding their voice to the campaign. John Charnock, UK managing director at specialist trade wine merchants Jascots, said, “We hold a large proportion of our stock ‘duty-paid’ so that we can send wines to our customers at short notice.

“As such, the huge duty costs in the UK have a very damaging effect on our cash-flow and we frequently pay duty weeks, if not months, before selling and being paid for it.

“Ultimately a 2% drop in duty would help us to retain and develop our valued employees, hire new staff and to continue to deliver an excellent service to a vital sector of the UK economy.”

Echoing this, Hal Wilson, managing director at Cambridge Wines, said: “With 50 members of staff and eight retail centres, we are a significant local employer, but it has been extremely tough to prosper over the last five years, thanks to a punitive tax regime.

“A 2% cut in alcohol duty would help us get back to the levels of growth we experienced in the past and the benefits would be felt throughout the hospitality sector,” he said.

The campaign is aiming to put pressure on the Chancellor, ahead of the UK budget next month, to make tax changes beneficial to the wine and spirits industry.