Excessive duty ‘restricting growth’ of English wine industry

A group of English winemakers have come together to call for a freeze on wine duty, which they argue is “excessively high” and unfairly restricting the industry’s growth while damaging rural communities.

Currently, 55% of an average priced bottle of wine sold in the off-trade is made up of tax and VAT. A planned 3.4% duty rise in this month’s Budget would add another 7p on a bottle of still wine, and 9p on a bottle of sparkling.

In the letter to the Chancellor and Environment Secretary Michael Gove, 14 of the WSTA English wine members have called on the Government to scrap planned tax rises to support the home grown English and Welsh wine industry, claims that its lack support for the industry is restricting growth and is damaging to rural communities.

“This action is necessary in order to support the current demand for English wine and the growth of the industry,” said Chris White, CEO of Denbies Wine Estate in Surrey.

“A duty freeze would also stimulate further our opportunity for export. We would like to see the Government adopt a model employed in all other EU countries where the lower duty rate has helped support the growth of their wine industry.”

Simon Robinson, chairman of Hattingley Valley in Hampshire, added: “The English and Welsh wine industry is a bright spot of the UK economy which is set to flourish so long as the Government provides a stable and supportive environment.

“Growth in the industry will provide significant rural employment and development as well as significantly underpinning developments in tourism. Increasing duty on our products is not helpful, especially when one considers the considerable additional revenue which will accrue to Government from increased employment in the industry.”

In November last year the Chancellor delivered a welcome freeze to alcohol duty leading to an extra £380 million windfall from alcohol duty, between February and July, an increase of 6% on the same period last year. The industry argues that another freeze would have the same effect, resulting in higher revenues for the Treasury, especially given the plentiful 2018 harvest.

The record heatwave this summer which has provided near perfect grape growing conditions, resulting in a bumper crop. And thanks to this year’s harvest the Chancellor is set to receive an extra boost in Treasury coffers when the 2018 vintage goes on sale.

Miles Beale, chief executive of the Wine and Spirit Trade Association said: “2018 has so far been a vintage year for English vineyards who are reaping the benefits of the record heatwave. The knock-on effect of near perfect growing conditions in the UK has led to high quality generous grape bunches and many vineyards have experienced their earliest harvests ever. With the good weather continuing into October our English wine makers are reporting a bumper harvest.

“But the Chancellor is planning to take the fizz out English winemakers’ success by adding to its already high tax bill this year, hampering the industry’s ability to grow, invest export and create jobs. We therefore urge the Chancellor to support this home-grown industry and freeze duty in the Autumn budget.”