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In Great Britain, alcohol tax will be indexed to inflation from 1 August, which will lead to an average price increase of 45 pence per bottle. According to estimates by industry representatives, this will affect around 90 per cent of all still wines.
"Tax rates on all alcoholic products produced in or imported into the UK will be increased in line with the consumer price index," the government's draft budget states. This means that a bottle of wine will become more expensive by around 45 pence due to the ten per cent increase in line with inflation and a further tax on higher alcohol content drinks, port wine by as much as £1.30 and a bottle of vodka by 76 pence. This would be the biggest increase in wine tax in the UK since 1975 and the biggest for spirits since 1981. Wines with an alcohol content of less than 12.5 per cent will be less affected.
Wine GB producers' association chief executive Simon Thorpe MW said: "We have been hit by an unprecedented tax increase. Along with the other inflationary increases in fuel, dry goods and production costs, an increase in the retail price of our wines will be inevitable. This may well affect sales and potentially hurt our producers. This is very disappointing."
Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA), is incensed: "The government's decision to penalise wine and spirit companies and consumers with a tax increase of 10 per cent on spirits and 20 per cent on wine from 1 August is staggering. This budget will further fuel inflation and damage the UK economy, especially those in the hospitality supply chain who are still trying to recover from the pandemic. The double tax increase on wine is a particularly bitter blow to UK wine businesses. It begs the question - yet again - of what the government has against the people who want to produce and drink wine."
(al / source: drinksbusiness)