MP’s have called for a duty cut to wine to support jobs and growth and provide a “level playing field” for the industry.
Speaking at a lively debate in Westminster on the English wine industry, ahead of the Autumn Statement, MP’s urged ministers to make representations to the Chancellor and not to leave the wine industry “unnoticed and unprotected”.
Tim Loughton MP, Chair of the All-Party Parliamentary Wine and Spirit Group, paid tribute to the UK wine industry and its “huge growth success story”.
He said: “We need some help on duty. This year, wine was the only alcoholic product to receive a duty rise. Duty on wine has gone up considerably over the last 10 years. The duty per average bottle of wine was £1.33 in 2007; it is now £2.08.”
His comments were echoed by Nick Herbert MP for Arundel and South Downs who also called for a cut and asked for equal treatment for wine.
As the MP representing the greatest number of English vineyards in Parliament he said: “There is a case for reducing wine duty in the same way as has happened for beer duty. It has been shown that that has a beneficial impact, and wine has rather lost out in the argument in recent years. Wine duty was frozen at one point, but generally it has increased, and that has a negative effect that could be addressed. I hope that the Minister will join us in making representations to the Chancellor to support the industry by lowering wine duty.”
The 30million wine consumers in the UK face some of the highest taxes in the world.
Overall duty on wine has increased by 56% between 2007 and 2016. This was partly due to the Alcohol Duty Escalator which increased wine duty by 2% above inflation for 5 years between 2008 and 2013.
Wine has been unfairly singled out for harsher treatment that any other product in recent years with wine being the only alcoholic product to receive duty rises in 2014 and 2016 and the only product not given a cut in 2015 – something wine drinkers find hard to swallow.
Brits currently pay a corking £4bn in wine duty in the UK, around £2.08 per bottle of still wine or £2.67 for a bottle of sparkling wine.
This means that for the average bottle on supermarket shelves around 55% of the cost is taken up in duty and VAT. UK wine drinkers are being left severely out of pocket compared to consumers in the rest of Europe and pay 67% of all wine duties collected by EU member states.
Neil Parish MP and Chair of the Environment, Food and Rural Affairs Committee, said the debate marked an important opportunity to highlight to government the growing importance of the wine sector.
He said: “Government must look at what can be done to create a level playing field. Excise duty is too high in this country.
At the last Budget in March, all other drink sectors received duty freezes, but the wine industry saw a duty rise.
If wine continues to go unnoticed and unprotected by Government, there will be a growing impact on the industry right across the board, from small to large producers.”
Closing the debate Defra Minister, George Eustice MP, said:
“Many honourable members invited me to get involved in the issue of duty on wine. I am sure Treasury officials will study the debate and look at some of the representations made.”
Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said:
“It is important and timely that MP’s debated the excessive and unfair treatment of wine at successive Budgets.
The UK wine industry is worth £17.3bn in economic activity, employs 170,000 people and contributes over £9bn in tax to the public finances from its 30 million consumers.
Government should follow the calls of the Members of Parliament to provide a level playing field for wine and cut excise duty.
With Brexit and projected inflation adding to the burden for UK businesses and likely to increase costs to consumers, now is the time to act.
Evidence clearly shows that reducing the UK’s excessive wine taxation leads to an increase in Treasury revenues.”
- The UK is the second largest importer of wine by volume, after Germany, and, by value, after the USA.
- One in every seven bottles of wine exported around the world ends up in the UK.
- The UK wine industry employs some 170,000 people directly in the UK, and a further 100,000 people in the supply chain.
- The UK wine industry generates £17.3bn per annum in economic activity including sales of £6.6bn in shops and supermarkets and a further £4bn in pubs, bars and restaurants.
- An approximate 600m bottles of wine, one third of the UK market, are bottled in the UK.
- There are over 30m wine drinkers in the UK, making it the most popular alcoholic drink
- Following the freeze in wine duty in the 2015 budget, wine duty income actually increased over the following year by £139m (+3.6%) from April 2015 – March 2016 inclusive.