Another post-Brexit price increase? Pass me the wine
The final stage of a complicated post-Brexit alcohol duty system will come into effect tomorrow, increasing the number of tax bands applied to bottles of wine and resulting in a hike in prices.
On 1 February, tax on all alcohol will increase by 3.6% in line with inflation, while the number of tax bands for wine will expand from one to 30, with duty per bottle ranging from £2.45 to £3.09, depending on its strength.
While the UK was in the EU, taxes on alcohol were set by EU rules.
In his budget speech in October 2021, former Tory Chancellor Rishi Sunak proclaimed: “And now that we’ve left the EU, we have the freedom to do things differently and deliver a simpler, fairer tax system.”
In August 2023, the then Conservative government introduced a system where alcohol is taxed at a proportionally higher rate according to the drink’s strength.
A temporary ‘easement’ was introduced for the wine industry, recognising the complexities of the new system for the sector, but this will come to an end tomorrow.
The wine industry warns that these complex post-Brexit tax rules will create more paperwork for retailers, who will have to work out different amounts of tax on every bottle of wine they stock.
This will in turn reduce the variety of wines available in shops, and ultimately drive up prices.
Chief executive of the Wine and Spirit Trade Association (WSTA), Miles Beale told Politico that “The changes are bad news for consumers, bad news for businesses, and even bad news for the public finances”.
“It fails on every level.”
The price of a bottle of strong red wine with an alcohol content of 14.5% to increase by 54p, while the tax on a bottle of gin will go up by 32p.
Taking into account duty hikes introduced in August 2023, the WTSA said tax on wine will have increased by 98p in a year and a half.
Beale said: “That basically means it’s an extra pound just in tax since the first of August in 2023”
“An average bottle of wine is about £7.50 so you’re suddenly increasing it by about a pound. That is a massive percentage increase and I think consumers will really notice it.”
Olivia Barber is a reporter Left Foot Forward
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