First the good news from Rishi Sunak’s ‘new age of optimism‘ Budget. The higher UK duty rate on sparkling wine will be removed and the tax rate will be the same for sparkling and still wines from February 2023. Instead it will be based on the level of alcohol, with the current duty rate of £2.23 plus VAT applying for wines of 11.5% vol. Duty is frozen for the moment but don’t be fooled by this.
While staying with family in Worcestershire, here’s a snapshot (above) of what the new duty rates will look like for still wines from Feb ’23 if the proposals go ahead. There are two bottles of Bauduc and four others I bought from Waitrose – in all, three whites and three reds.
The German Riesling at 12% alc/vol will cost 12p more in tax, the 13% Bauduc Sauvignon 35p more, while our Bordeaux red, the French Cabernet Franc red from Saumur, and the South African Chardonnay, a whopping 47p a bottle more (13.5%). The Argentinian Malbec at 14.5% will cost an extra 70p in duty.
Here’s the list of winners and losers, speedily compiled by my friend and wine industry expert, Robert Joseph. (@RobertJoseph on Twitter.) Note that there is VAT on duty as well as the wine itself. While we are happy to see the duty rate on our Crémant go down, is saving 64p on a bottle of £25-£35 Champagne or English Sparkling wine (at 12%) going to compensate you for the cost of drinking still wines, far more regularly, at an increase of 24p to 58p a bottle (12% to 14%)?
It is, though, good news for drinkers of inexpensive Prosecco, with 87p saving on a £7 wine at 11% vol. (There’s still £2.56 UK duty on it, about £2.50 more than you’d pay in duty in France for Prosecco, Crémant, Cava… .)
The ‘consultation’ document from the Treasury can be downloaded here.
The last consultation document I saw from the Treasury on alcohol was on the amount of still wine you could bring back from the EU after Brexit, for private use. They reduced it from *unlimited* to 24 bottles. So I fear the worst, tax-wise, for the still wines people want to drink.
It’ll be interesting to see the reaction of the Australians and Kiwis, after so much twaddle by the UK Government of removing EU tariffs of 6p-11p a bottle. 87% of Australian wine sold to the UK in the 12 months to the end of June – a mere 360 million bottles’ worth – was shipped in bulk (unpackaged), with bottling in the UK. The average export value ‘Free on Board’ for all their bulk wine shipped globally was the equivalent of around 54p a bottle. The last figure I’ve seen for the UK export value was 44p a bottle, for 2018. (Source: Wine Australia.) An Aussie red at 13.5% will see close to 47p more in UK duty – around the same value as the wine itself, and that’s just the increase. (The duty will be £3.14 inc VAT on the duty for a 13.5% wine, or £3.03 for 13%.)
And who’s going to police all this? The grand total of six wine inspectors in the UK, according to one leading wine merchant. At 1,750 million bottles a year in UK consumption, that’s around 300 million bottles each to monitor. They’re going to be busy.
Feel free to comment.
The reduction in “duty free” personal imports is just another example of spitefulness by HMRC in revenge for the UK population voting for Brexit. There are many others such as the imposition of VAT on goods bought in the EU before 1/1/21 when they are brought to UK by their owners (especially significant of high value items such as boats bought in the EU) and the extremely complicated and restrictive rules about “repatriating” personal effects taken to the EU from UK before Brexit, especially important for furniture and artwork taken to a second home in EU when they are brought back to UK for whatever reason. If they have been altered or repaired while in the EU duty and VAT has to be paid!
Gavin & Angela, thanks to you and Robert Joseph for the ‘winners & losers’ table. Aussies and Kiwis appear unsurprised by the contradictions emerging from discussions with UK!!
Does Chateau Bauduc have a sales point in Dublin by any chance?
Is there really a need for so many wines to be so strong, though? Back in the day 12% was considered quite high in alcohol content, and the push to higher strength wine seemed to be driven by the “wrong” reasons of getting a certain demographic drunk more quickly – or perhaps more to the point, winemakers seemed to rush to fulfil the demand from that demographic. It will be interesting to see whether what appears to be a little bit of social engineering in this regard from the Government will actually have any effect on the balance of demand!
Too be honest for people buying ‘decent’ quality wine (£10 a bottle & above) a few tens of pence a bottle isn’t going to really bother them that much. What I’m struggling with at the moment is justifying to myself buying anything from France. I’m aware this may be ‘cutting off my nose to spite my face’ but irrespective of which side of (or on) the fence you sit with regards to Brexit the amount of spite from the French government aimed in our direction recently is just uncalled for and sometimes I feel I must make a personal stand. I may justify further purchases of Bauduc as you are ex pats, but I still need to have that conversation with myself.