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Is mead the winner of the duty changes?
Mead looks set to be one of the few winners from the new alcohol duty regime due to come into force today (1 August).
A pint of draught mead looks set to drop by 9p, and movement away from being in the ‘made wine’ duty category to ABV should allow for greater experimentation and commercialisation, according to one producer.
Tom Gosnell, founder of Gosnells, said draught mead would be brought into line with beer through the relief scheme, and alongside the Small Producers’ Relief “should allow the burgeoning mead sector to invest in itself.”
He said: “This is both vital and timely, as it has cost a lot of money and time for the likes of Gosnells and Lyme Bay to create a ‘new’ drinks category and rising costs and inflation have not been exactly helpful. It’s been very painful and the old duty rates did not help.”
“Gosnells was in the ‘made wine’ category: So, this duty reform is a boon. It means that gone are the days of us being stuck in the rigid structure of the previous regime, whereby a mead was taxed the same at 6% and 15%, effectively making anything at around 8% commercially difficult, as, unfortunately, consumers aligned ABV with what something should cost”.
But Gosnell said now that duty will increase proportionally with ABV, the mead sector was “free to experiment and innovate across a range of strengths, better reflecting the drinks we’d want to produce”.
He said the previous “anachronistic” regime had assisted the cider sector, which had helped large scale multinationals, rather than “rugged rural types with rubicon cheeks”.
Gosnell compared the new situation to former Chancellor Gordon Brown whose changes to the tax system, through small brewers’ tax relief, incentivised the craft beer industry to explode across the UK.
He said: “This relief enabled small breweries, employing lots of local labour and often selling locally, to compete more effectively against the multinationals with the latter’s economies of scale.
“It’s in the spirit of this that the government has approached this duty reform – a base layer of duty that attempts to even the playing field between the different categories and to align duty with ABV. This will remove the weirdness of the previous regime whereby wine was taxed the same with no regard to its level of alcohol, be it 10% or 15%.”
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