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Proposed Changes to Wine Duty Rates

I think this is the first time i have started a thread but i think the proposals for wine duty due to be applied from 2023 will be of interest to all of you. These formed a significant part of the PR surrounding the budget and yet as wine drinkers we will see costs rise sharply, with beer seeing reductions and spirits broadly neutral. This was vaunted as:

  • Simple
  • Fair
  • Reducing Red Tape

The reality is that the proposals fail on all counts. Charging duty by ABV is not inherently bad but becomes bad when their is no clear and consistent rationale for application. Wines and fortified wines from 11.5 degrees bear the brunt of these changes. Retailers will differ a little in their mix, but these changes will add £1.7m to TWS duty bill - a staggering increase.

It is not simple - we calculate that we will move from 2 duty rates to 38

It is clearly not fair across the beers wines and spirits category.

The red tape associated with this is breathtaking. Every wine retailer will have to plan major systems up-grades, it is very difficult to determine exact alcohol content in any event, and the paperwork and labelling changes will be onerous. This is difficult for us, but i pity a smaller enterprise facing into these demands.

The much vaunted Australia Free Trade Deal used wine to illustrate the benefits to UK consumers. With these changes we could see £1 going onto the price of a higher alcohol Australian wine.

I form part of a small group along with the WSTA who are opposing these changes and you may have seen the start of the PR campaign at the beginning of the year. Meetings with ministers and civil servants are at an early and so far unproductive stage.

I post in order to start a discussion, but for those of you inclined to write letters to newspapers, this would help our push enormously.

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Do TWS (or indeed anybody) have some sort of easy-to-digest table of the proposed changes?

Just to aid our (my) understanding. There’s plenty of headlines out there, with accompanying opinions, but it would be good to see an item-by-item impact (if possible?).

Maybe simple and fair only applies to wine purchased in a suitcase for work purposes…clearly you might still need some tape to hold the suitcase together…

…glad to hear that you are fighting this, perhaps if Community members all raised it with their MPs it might help too? Particularly those with a Conservative MP…

Another example of lies from this Government being accepted by the majority without questioning it maybe.

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Gotta pay for all that ‘chums rates’ PPE somehow.

Looks like we are heading back to the good old 1970’s when beer was the thing & wine a luxury enjoyed by the professional classes. I guess TWS can hold on to the more modern warehouses and lease / sell the older ones facing Gunnels wood road?

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A large enough minority to form a government is the usual MO.

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Thank you, @SteveF. I was pretty dismissive of the announcement when it was made in the Commons, but having read what it implies, I am now angry.

To remind ourselves, it was heralded by the Chancellor as “Today we are taking the advantage of leaving the EU to announce the most radical simplification of alcohol duties for over 140 years.” Is this sort of bare-faced lie now acceptable political discourse? And why - like so many other things that were going to liberate us from the “yoke of EU bureaucracy” - has it resulted in a greater blizzard of bureaucracy than we ever had before?

Lest anyone think I am launching an anti-Brexit rant, that is not my purpose. Brexit is over and done, and we all need to get beyond that. Making life more difficult for everyone whilst simultaneously lying about it is deplorable, and a letter to my MP will be drafted tomorrow. And maybe one to the Parliamentary Commissioner for Standards.

Meanwhile we can I suppose draw some comfort from the fact that Prosecco is no longer “the preserve of wealthy elites”.

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I would take issue with this statement. From a pithy political sound-bite point of view it is, but the reality is, it was such a bodge job (who’d a thought, eh?) that it’s precisely the root of most of the problems we’re facing. It is, unfortunately, very far from ‘done’, and we face years of trying to ‘do’ it.

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What I suppose I should really say is “that the act is done”. We do still have many, many people re-living the pro- and con- Brexit arguments. That is time wasted, self-indulgent and potentially divisive. Can a house divided against itself stand?

What we need to focus on in this area is the sort of Brexit we make for ourselves. And I agree, there is endless years of this to be negotiated, as indeed we will continue to negotiate relations with non-EU countries. We are desparately falling down on this.

This is a rather windier version, but it is why I put things that way. Maybe it’s got some commonalities with your POV, @Tannatastic?

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In all honesty, I don’t object to paying a bit more duty than currently if it is calculated in a fair and straightforward manner. The deficit on public finances right now is pretty horrifying. It’s got to come from somewhere and bottles of wine at £10 and up are a very easy target, acceptable to pretty much the whole society.

However, I utterly object to this total shambles of a duty scheme. Wine going from 2 duty rates to 38!! How does the chancellor think any business, let alone a small business is going to manage this without significant challenges and costs.

Patently bullshit, but there’s no way the chancellor will back down from this while he still hopes to be Prime Minister fairly shortly

As @MarkC and @Ghost-of-Mr-Tallis mention, why stop at newspapers? How about letters to MPs? Is it utterly lazy of me to suggest a template for us to add our details to and send straight to the relevant minister and our local MP. Maybe the WSTA already has something we could all use and pass on to similarly-minded friends and associates?

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Suggestion for a basic template seconded!

It’s a complex and opaque subject so some basic bullet points for individuals to construct a letter around would help I think.

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One example is the spanking new trade deal we’re meant to have signed with the US. They won’t enter into one with us A) quickly -they take time B) Until we sort NI out. We’re clearly incapable of sorting out the NI issue, because the whole premise of the Leave campaign was to ignore the NI issue before the referendum in the hope no-one would notice (the italics are very important).

So in that sense, yes arguments will get regurgitated over-and-over, because the mess we’re in is a self fulfilling prophecy - it was always going to be a mess. It will only stop being a mess when it’s accepted that some of the promises attached to Brexit cannot - can never - be fulfilled. And from a psychological point of view, that in itself will be very difficult with quite a few people, because it has become a quasi-religious belief system (faith, not reality) - they have been promised the moon on a stick. Especially difficult because there is no moon. And we don’t own the stick either.

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He learnt his trade well at Goldman Sachs clearly :wink:!

Only, and arguably, in a very narrow legal sense…the nightmare is only beginning…I think that we may see that as the beginning of a long and tortuous road, which we may not even know we are on for a while, to get back into the EU in some form, and I sincerely hope so, and make no apologies here or anywhere for continuing to launch an anti Brexit rant, or more accurately a rant against an act of self harm promoted by a bunch of liars.

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Give me a little time and will post the way it is planned to implement and a template for communication (there is one!) thanks for contributing to the discussion. I thought I could rely on you for some robust views.

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As a civil servant (I admit it, clue is in the name) I’ll take the opportunity to say that individuals should write to their MP about this and any other issue. That MP should (and if they’re any good will) then forward to the relevant minister (the chancellor in this case) for him/her to reply. In reality some functionary like me will respond but ministerial advisers, the political appointees rather than yet more Whitehall pen-pushers, do monitor all this stuff so volume of correspondence will see things noticed. All the governments I’ve worked under have been very worried about upsetting too many of their own potential voters so believe me whilst a single letter might not achieve much a combination of businesses and constituents expressing discontent will have MPs getting concerned.

And for avoidance of doubt I don’t work for HMRC or the Treasury so can offer no help on dealing specifically with them.

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@Mandarin is right - as another public servant the scale of response is usually directly proportionate to the volume of complaints, rather than the severity of the issue.

This is quite frustrating and in some cases a little sickening (because those inclined to complain are rarely those in real need) but it is true, and on an issue such as this (where I don’t think complaints are removing resource from dealing with a more serious issue) I’d echo the calls to write to MPs.

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I can totally understand the anti-Brexit views - I am a europhile, I did not vote for Brexit and hate the effects, one of which is for us as wine enthusiasts to spend too much time on how we ended up in this situation/mess/disaster; that will be for the historians to document.

I welcome the thread as a focus on what is wrong with this legislation for us as oenophiles, the disaster it’s about to be for small businesses and the untruths that were said on the day by the chancellor. As the Society’s CEO has clearly detailed at the start of the thread, the effect is serious and not at all ‘simple’. While it can be dressed up as making ABV the defining guide for charging duty, I have yet to see consistent evidence that this is the case. ‘Red Tape’ has always been the bête noire of the governing party, yet our retailers are about to be swamped by it. Wine drinkers have again been the easy target of the government, who have done very little to realise any benefits whatsoever from the massive changes to our ways of trading with the world.

I agree with Steve Finlan and the WSTA and will be doing something I’ve not done for a very long time; I will be writing to my MP and making as much noise as possible about yet another poorly thought out tax rise.

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Interesting paper by the Scotch Whisky Association about the unfairness of the new proposals. For example:

The principle the Chancellor set out – “the stronger the drink, the higher the rate” – will continue to discriminate against distillers. The decision to base future taxation on alcohol strength, rather than alcohol content, is misguided and wrong. The proposals embed the mistaken belief that lower abv products are somehow better, or less harmful, than higher abv products. They ignore the fact that a 4% abv pint of beer or cider contains 2.3 units of alcohol – more than a typical spirts-based cocktail with 2 units – and proceeds to tax alcohol served in this way less. The proposals penalise the vast majority of people who consume alcohol responsibly when they choose to enjoy a spirits-based drink over other alcohol. And they would mean spirits producers would continue to bear a heavier tax burden than other alcohol producers, which penalises Scotland, given that 92% of all UK spirits are produced or bottled in Scotland.

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@Tannatastic this is a simple calculator which shows costs side by side

https://www.cellarexchange.com/tax_calculator.html

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I have mixed feelings about this issue.

Firstly I recognise and support the need for increasing taxes, carefully, in the right way and at the right time. Duty will always be an easy hit.

I would argue the new approach is both simple and fair. The stronger the ABV of wine, the higher the duty.

But the impact of the transition to the new arrangements is less fair, with an overnight change and disproportionate effect on some wine strengths when compared to current duty levels.

As for the objective of ‘reducing red tape’. Well that is nonsense, and I have huge sympathy for the industry - particularly the small players for whom this will be disproportionately burdensome to prepare for and administer.

Most consumers buy their wine duty paid - this change will be completely invisible to them in terms of the various elements of cost making up the final price, apart from them seeing an increase in price.

It will be interesting to see what happens to prices. A 14% abv wine currently retailing at £12 will become £12.58, other things being equal.

So the question becomes whether the retailer still charges £12 by absorbing the cost, charges £12.58 by passing it on it full - or takes the opportunity to increase prices to £13…and with costs of implementing change, increased shipping costs, extra national insurance costs, I can guess which it’ll be.

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There is a post on this thread showing item-by-item comparisons of tax before and after the changes. Not sure how to directly quote the post from another thread.

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