Listening to David Cameron’s important speech on Europe last week, anyone at the sharp end of the UK wine business must have raised a quizzical eyebrow at his unqualified support for the Single Market. In contrast to his laudable vision, tax on wine in the UK is completely out of line with other countries in the EU, and the gap is widening.
’So let me set out my vision for a new European Union, fit for the 21st Century,’ the Prime Minister said on 22 January.
’It is built on five principles. The first: competitiveness. At the core of the European Union must be, as it is now, the single market. Britain is at the heart of that Single Market, and must remain so…
’It is nonsense that people shopping online in some parts of Europe are unable to access the best deals because of where they live. I want completing the single market to be our driving mission.’
So why, then, is wine taxed so heavily in Britain compared to the continent?

As things stand, and it will be interesting to see what transpires when the Government’s consultation period on its alcohol strategy ends on 6 February, UK duty will hit £2 a bottle in the Budget on 20 March.
That’s 50% up from £1.33 in five years, whereas in the eight years before that it nudged up a respectable 15%. Duty on sparkling wine, including the now fashionable fizz made in England, will be around £2.55 a bottle. (We can bank on these figures, currently £1.90 and £2.43, because the Chancellor has persisted with the duty escalator that Labour introduced in 2008.)
Then there’s the double whammy of VAT on the duty as well as the wine, so the real duty cost will be £2.40 and £3 a bottle, for still or sparkling. And that’s without including the margin that retailers, merchants, pubs and restaurants have to add on top: believe it or not, duty costs more than the wine itself for the vast majority of bottles sold in the UK (that’s on anything under £7 retail – the average is a fiver – or £17 or so in a restaurant).
Meanwhile, and here’s the rub, there is no duty at all on still wine in 17 EU countries, including Germany, Italy, Spain, Portugal and Austria. In France, it’s 3p. To quote the Prime Minister’s fifth principle – fairness – how fair is this for Britain? Keep reading