Jake Bennett-Day, of Vino Gusto, in Bury St Edmunds, rails against the Chancellor’s recent budget and its negative impact on the wine industry
Who am I, as a wine merchant, to comment on the state of UK tax policy? Is a sentiment I would strenuously agree with, 99.84 per cent of the time. The remaining 0.16 per cent represents my time on earth since the 2024 autumn Budget. In that short period, I have discovered I have a lot to say.
I am not alone. It appears the UK wine industry and indeed the wider hospitality industry are unimpressed by the catastrophic consequences of Reeves’ autumn Budget.
Of course, the headlines and Labour Twitter/X account will boast the Chancellor’s penny-off-a-pint generosity (read: lie), but neglect to mention the increases to National Insurance contributions, business rates and minimum wage that will dwarf any such 1p saving on your pale ale.
If the industry collectively views Reeves’ Budget as a building fire, the penny-off-a-pint claim has the equivalent effect of using a landlord’s tears to extinguish it.
Naturally, nobody reading this is as interested, or concerned, as I am about the UK wine tax system, so I’ll spare the details and stick to the headlines.
The UK currently has the third highest rate of alcohol duty in Europe and pays two thirds of all alcohol duty on the continent. That total is due to increase from February 2025, when the UK launches a new wine duty system – a ‘sliding scale’ - based on the alcoholic strength of each bottle.
Superficially, this makes sense. The more harmful the drink, the higher the rate. Though the policy applied to wine being masqueraded as a public health initiative is laughable. It’s rarely empty bottles of bottles Barossa Shiraz or vintage port are found littered around park benches, in my experience.
The delivery of this new system is incredibly complex and will ultimately be unworkable for smaller, family-owned import businesses.
The number of different duty bands is set to rise from three to more than 30, raising the prices of most wines and likely encouraging producers to industrially reduce alcohol content, thus globally affecting wine quality. This follows the punishing duty increases of autumn last year, which saw alcohol get hit with the largest tax increase in 50 years.
Between September 2023 and Augusr 2024, a year since the introduction of that most recent duty increase, HMRC reported treasury receipts from alcohol were a whopping £1.3 billion lower than the previous year. To borrow from television’s favourite wine presenter, Joe Fattorini, he quantifies that number poignantly: “To put it in the preferred measure of British newspapers, that’s the equivalent of more than 37,000 nurses.”
So, the new tax system is very unlikely to result in greater treasury receipts and it will leave Britain paying the highest alcohol tax rates in Europe.
Those who know of me from the shop will be bored senseless by me reiterating the value proposition of wine and how, by spending just a few more pounds, you’ll be able to trade up significantly in juice quality.
To emphasise that, from February, half of the price of £9 bottle of wine with an average 13.5 per cent alcohol content goes immediately to the UK Government. That does not leave much for the juice inside of the bottle, once all the other things have been paid for and somebody has made some money.
The wine and hospitality trade offered countless warnings against the proposed duty reform which was announced by Rishi Sunak in 2021 during his time as chancellor.
To me, it seems that Labour have wasted an opportunity to unpick and reverse this ill-conceived Conservative policy. In doing so, ignoring their own pledge to remove red tape for businesses and facilitate growth.
At a time when the Treasury is trying fill the void in the country’s finances and drive economic growth, it has pushed on with a poorly planned policy that will undoubtedly reduce revenue from alcohol duty receipts and fails more than 1,000 independent wine merchants cross the country. The new duty system only implies added complexity and cost, while making wine drinkers poorer and businesses less viable.
Bit of a different tone to my usual column, I realise. But it has become very clear to me that it is my duty as someone afforded the luxury of a voice within the industry to use it when our trade is in need.
The wine, drinks and hospitality industry is blessed with wonderful communicators in the way of writers, broadcasters, advocates and influencers. But since our industry came under the worst attack in a generation, many of those voices seem to have fallen quiet on the subject matter.
One of a number of notable exceptions to that is the wonderful Tim Atkin MW. Tim has proposed an initiative that, if you are a wine drinker, I’d like you to join me in participating in.
Collect your wine bottle caps or capsules. And send them to: Rt Hon Rachel Reeves MP, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ
Enclose a polite note urging her to “#capthewinetax” and stop the exorbitant and potentially ruinous February duty hike on wine in the UK. You can also write to your local MP urging them to oppose something that rips off wine drinkers and will damage the wine and hospitality industries. Together we can stop this. Please share and support our campaign.
Jake Bennett-Day is co-owner and director of Vino Gusto wine shop, 27 Hatter Street, Bury St Edmunds IP33 1NE
Call 01284 771831
