UK Duty on Wine up 46% in 4 Years

 “Today, I have no further changes to make to the duty rates set out by my predecessor.”

George was at it again in this year’s Budget. Of course, the Chancellor could have said “Duty on alcohol will increase by 2% above the rate of inflation, as put in place by the previous Government” but the news channels would have picked up on that bit of bad news.

The official Budget document doesn’t actually say what the actual increase is. “As announced at Budget 2008, and extended in March Budget 2010, alcohol duty rates will increase by 2 per cent above the RPI. These changes will come into effect from 26 March 2012.”

Anyway, here are some numbers and a few updated graphs.

1.  The duty on still wine goes up on 26th March 2012 from £1.81 to £1.90 a bottle, plus VAT on the duty as well as the wine.

2.  Including VAT, that’s an 11p increase, to a total of £2.28 duty per bottle. (Or £22.80 a case, plus VAT on the duty = £27.36 duty per case.)

3.  Before the March 2008 Budget, duty on wine was £1.56, so we’ve seen an increase of 46% in just 4 years. In the 8 years before that, duty went up 15% in total.

4.  Duty is counted as part of the cost price by retailers and merchants, so one would expect to see prices rise by more than the 11p if margins are maintained.

5. Duty on sparkling wine has gone up to £2.43 a bottle plus VAT (£2.92) – £35 a case. Bloody Nora.

6.  Many Brits have little idea that duty on wine in many EU countries is almost non-existent. The 11p duty rise alone is more than the total duty on a bottle in France, Germany, Spain, Portugal, Italy and Austria put together.

How fair is that?

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11 thoughts on “UK Duty on Wine up 46% in 4 Years

  1. Mark Chamberlain

    As ever, Gavin, you're right on the money. Trouble remains: how to get the message across effectively? Especially when supermarkets will screw producers to keep prices down and almost all consumers are watching the pennies…

    Hope you and family are all well.

    Best, M

    1. Gavin

      Cheers Mark. Slight delay in replying due to Ange and me being on a flying visit to taste with King Cod down in Padstow. On tight margins, the duty rise makes it tougher to put our prices up on top. It was expected though.

  2. Peter Richards MW

    Beautifully put, Gavin. Pithy and to the point. Wonderful analysis. Much critical ink is being spilt on this but you sum it up perfectly in two well chosen words: 'Bloody Nora'.

  3. Johan

    I though it was only the South African government that was trying to kill the goose that’s laying golden eggs!

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  6. Alek Boyd

    An excellent follow up on your previous write up on the subject Gavin.

    Now that I'm here I want to ask something I've been thinking about a lot lately: are you by any chance aware of the legality -or lack of- of double taxation according to EU rules?

    It is obvious that HMRC see no problem in pilling VAT on top of duty, but how about EU legislation to that effect? If there isn't one, perhaps we should start a campaign to break this most damaging taxation system that's killing jobs, trade, and prospects for all involved?

    1. Gavin

      Thanks Alex but I'm afraid I don't see your campaign getting off the ground. I agree with the sentiment but I think you need a better angle than a point of EU tax law. Answers on a post card…

  7. lazenne

    Thanks for this informative article Gavin. I stumbled upon it when doing some research for my company. Lazenne sells a specialized wine luggage enabling travellers to take 12 bottles of wine on the airplane. This article confirms for me that it's definitely worthwhile to travel to countries such as France, Italy and other EU wine regions and bring back up to 90L of wine as per the EU personal consumption limits.