WSTA Logo

English vineyards call on Hammond to freeze wine duty

Philip Hammond is being urged to scrap planned tax rises to support the home grown English and Welsh wine industry.

Frustrated English wine producers have put their concerns over Government’s lack of support for the industry in a letter to the Chancellor and Environment Secretary Michael Gove calling for a freeze on wine duty.

In the letter signed by 12 of the WSTA English wine members says the significant tax burden is restricting growth and is damaging to rural communities.

Britain’s biggest wine producers want to understand why the Government insists on taxing what we do best most heavily.

Sam Linter Managing Director and Head Winemaker at Bolney Wine Estate:
“We find it difficult understand why the Chancellor insists on continuing to tax so heavily this great British product. We can now proudly say that our wines are competing with some of the best all over the world, and it is disappointing that we are being taxed so heavily at home. We are fully behind the WSTA’s call for the chancellor to freeze wine duty and help the English wine industry continue to grow.”

Mark Driver, founder and owner of Rathfinny Wine Estate with his wife Sarah, said:

“When two thirds of wine produced in England is sparkling wine and it’s widely perceived as some of the best sparkling wine in the world, it seems illogical that the duty on sparkling wine is 28% higher than still wine. In fact it’s the most harshly treated of all alcohol categories. We support the WSTA’s call to freeze wine duty and we’d like to see the government support our growing domestic sparkling wine industry by harmonising the rate of duty between still and sparkling wine.”

In March the Chancellor increased wine duty by 3.9% which added 8p to a bottle of still wine and 10p to sparkling. Yet despite the rise, the Chancellor now plans to increase wine duty again, just 8 months after the last one, by 3.4% in the November Budget adding another 7p to still and 9p on sparkling.

The rapid spread of English vineyards making top quality wine has led experts to comment that the UK is where New Zealand was 30 years ago in the comparative size and the success of its wine industry.

To have a chance of emulating New Zealand’s successes English and Welsh wine industry needs its governments backing.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:

“English wine is a great British success story and we are now producing top quality wines for the home market as well as to export. The UK has the potential to follow in the footsteps of New Zealand’s trail blazing wine success story, yet the industry is being held back by the staggering amount of duty it has to pay. By adding to its already high tax bill this year, the Chancellor will hurt the industry's ability to grow, invest export and create jobs.

We therefore urge the Chancellor to support this home grown industry and freeze duty in the November budget.”

Following the freeze in 2015, wine duty income increased by £136m, up 3.6%, on the previous year.

The current Chancellor’s harsh duty policy is a stark contrast to how other countries treat their vineyards and wine makers.

Around two thirds of the wine made in England and Wales is sparkling wine which attracts the most duty, at £2.77 on a bottle of fizz. UK consumers pay £2.16 for a bottle of still wine.

In New Zealand they pay less than half the duty at £1.18per bottle of still or sparkling wine.

In France, where the wine industry is heavily supported, consumers pay the equivalent of just 7p a bottle on duty for sparkling and 3p for still.

In the EU only Ireland, with no domestic wine industry, has a higher rate of excise duty on sparkling wine.

The UK alcohol industry is one of the most heavily taxed in Europe, with British drinkers paying an extraordinary 68% of all wine duties collected by all 28 EU member states. This is by far the most of any member state despite accounting for only 11 per cent of the total EU population.

English sparkling wine has been gaining international recognition over the past few years, leading to a trophy cabinet bursting with awards and attracting Champagne houses, such as Taittinger and Pommery, to invest in English vineyards.

There are over 500 Vineyards in England and Wales and around 150 wineries producing 5m bottles of wine a year.

An English wine producer selling 250,000 Bottles of sparkling wine in the UK this year will face a duty bill of close to £692,500. The rise in March added £26,000 to this bill and the Government’s planned rise will add a further £24,000 in November. This is money that could have gone in to investing in new land, vines, machinery, growing its workforce or helping it export.


Wine and Spirit trade bodies from both sides of the channel sign up to a united approach to Brexit

The Wine and Spirit Trade Association has joined up with trade bodies from across Europe to agree a ground breaking Brexit position paper,  accompanied by the Press Release

While politicians refuse to discuss the future trade relationship between the UK and the EU, prior to agreeing the financial settlement, the WSTA has been working hard behind the scenes to secure the continued flow of goods post Brexit.

Partnering with - the Scotch Whisky Association (SWA), spiritsEUROPE and the Comité Européen des Entreprises Vins - the WSTA suggested that it was up to industry to nail down key issues long before the Article 50 deadline and are calling on politicians on both sides to do the same.

With officials continuing to lock horns over Britain’s exit from the EU the trade has decided to take the bull by the horns and lead the charge.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:

“The WSTA is unique in its representation of both wine and spirit businesses. Both the European Council and the British Prime Minister have emphasised the need for the EU27 and UK to remain close partners in the future. There is little sign of any progress being made to ensure this happens which has led the WSTA and trade bodies throughout Europe to take the bull by the horns and publish a position paper to protect our shared wine and spirits industry.

“At the WSTA, we have been calling for transitional arrangements to give us as much time as possible to adapt to Brexit, with the aim of securing an agreement between the EU and UK that ensures frictionless trade, preserves fair competition and maintains consumers’ confidence in our products.

“We, like our partners in the wine and spirit trade across Europe, strongly support the UK and EU securing a comprehensive trade agreement that enables us to continue to do business and provide our products to consumers across the continent.”

Unlike the politicians negotiating the divorce bill there is a high degree of positive integration and collaboration within the European wine and spirit sector who have worked together for the last 44 years.

In what is believed to be a first, the joint paper sets out the European industry’s shared Brexit requests and maps out how to overcome issues affecting the industry.

The wine and spirit sectors currently depend on the freedom of movement of goods, and also benefit from the freedom of movement of people and capital within the EU. These benefits are currently extended to the UK as a result of EU membership, and ensure smooth transit of goods across the continent.

The wine and spirits industry has come together to urge the EU and UK to reach a negotiated settlement that preserves trade flows and avoid border tariffs and related administration costs.

The paper makes clear that it is the united position of wine and spirit producers across Europe that no deal is an unacceptable outcome from negotiations.

A post-Brexit relationship should also look to preserve the high degree of harmonisation and convergence of legislation found in both the EU and UK markets, with continued harmonisation of wine and spirits definitions, wine making practices and mutual recognition of Geographical Indicators (GIs).

The trade bodies outline 46 existing spirit categories, including many that are deeply rooted in European culture and tradition, like whisky and vodka, and around 240 registered GIs that offer protection to Cognac, Scotch Whisky and Irish Whiskey.

The UK is the world’s second largest importer of wine by volume and by value and is a significant market for wines produced in the EU, whilst the EU represents a significant export market for British spirits.

Wine and spirits traded between the EU and UK are not currently subject to tariffs, and unless the UK remains in the Customs Union, or a Free Trade Agreement is negotiated between EU and UK, this tariff-free environment would change post-Brexit.

Jean-Marie Barrière, President of CEEV said:

“We produce high-quality products – including PDO/PDI wines and GI spirit drinks – that support hundreds of thousands of jobs, investment, and significant bilateral trade between the EU27 and the UK.”

Joep Stassen, President of spiritsEurope said:

“The continued success of our sector relies on the agreement of a framework for the future relationship; and the transitional rules that would ensure trade continues with minimum disruption after the UK’s exit from the EU.”

WSTA celebrates successful Fringe events

The WSTA have wrapped up two successful Fringe events, at the Labour and Conservative party conferences.

In Brighton for Labour’s Conference, the WSTA’s ‘Gin on the Fringe’ event took place at the British Airways i360, and was hosted by Peter Kyle, Labour MP for Hove. Guests were treated to locally produced gin from Brighton Gin, and wines from both Nyetimber and Fourth & Church, a local wine merchant.

DKlz 52X0AAfc6b

 

Peter Kyle MP then took part in a Q&A with Matt Forde, from shows such as Unspun on Dave and Have I Got News for You on the BBC, and discussed his increased majority in the General Election.

In Manchester, the WSTA’s ‘Gin and Tories’ event was hosted by Graham Brady MP at the Epernay Bar, where it was announced that backbench Tory MPs will visit the City of London Distillery to create their own gin, in advance of the 1922 Committee’s 100 year anniversary. City of London Distillery and Berry Bros & Rudd provided drinks to guests on the evening.

Both events were designed to champion Britain’s gin industry, and coincided with the delivery to the Treasury of the WSTA’s Budget submission. During the events, Miles Beale, the WSTA’s CEO, called on MPs to support both the British gin industry and the wider wine and spirit sector in November’s Budget.

DLRvoksXcAA8PQv

The WSTA’s submission details the enormous amount of duty payable on wine and spirits - £8.05 is paid on duty alone on an average-priced bottle of 40% abv gin, and when combined with VAT this means that 76% of the price is tax. Duty and VAT on an average-priced bottle of wine (75cl) makes up 55% of the cost, with the costs even higher for sparkling wine.

British gin in particular has become a huge success story, and needs the support of Government, in the form of a duty freeze in November, to continue to grow.

MPs also heard across both events how the Government can further support the industry, by encouraging Embassies to routinely serve British gin and English sparkling wines at events. Prioritising Free Trade Agreements with the EU, The Far-East and the USA, all major export destinations for British wine and spirits, would also help producers, the vast majority of which are small and medium-sized companies, to take advantage of the thirst for brilliantly made British drinks overseas.

Latest statistics from the WSTA show that some 36.3 million bottles of gin have sold in the last 12 months in supermarkets and shops, breaking the £500 million barrier for the first time and an increase of £200 million since 2012.

In pubs bars and restaurants, the WSTA figures show a similar upwards trend, with 8.3 million bottles of gin sold worth £687m in the same 12 months.

 

UK’s punitive wine and spirit duty rates are turn off for trade

The WSTA is calling for a freeze to wine and spirit duty in the Budget on November 22nd to help back British business and bolster Brexit trade deal opportunities.

Phillip Hammond is due to increase duty by another projected inflationary rise of 3.4%, in the second punishment Budget of the year, as the Government moves its main fiscal event from spring to autumn.

In March this year the Chancellor raised all alcohol duties by an eye-watering 3.9% which added 8p to an average priced bottle of wine and 30p on a bottle of spirits.

The WSTA is warning that there will be little to celebrate this festive season with duty set to go up again, a month before Christmas, adding another 7p on a bottle of wine and 26p for spirits.

The looming hike in duty causes real concerns for UK wine importers who fear the unappealing duty regime will hamper trade negotiations and damage future investments.

Following the release of the Government’s white paper on trade this week Liam Fox highlighted that imports to the UK were just as vital to the economy as exports.

The wine and spirit trade with the EU is worth almost £4.5 billion to the UK. In 2016 the UK traded £2.2 billion of spirits with the EU and traded just shy of £2.3 billion in wine.

The last time the UK experienced a double hit on alcohol duty increases was almost a decade ago under a Labour government and during the financial crisis of 2008.

Overall plans for an inflationary rise, in a second Budget in November, would cost the wine and spirit industry around £220m in new tax liabilities.

The industry faces £1.9bn higher duty bill by 2022 if rises planned for the duration of Parliament go ahead.

The WSTA is calling on members to lobby MP’s to highlight the UK’s grossly unfair alcohol taxation policy which is leaving everyone out of pocket.

Wine businesses and consumers already pay a staggering £4.2bn in duty each year and spirits consumers and businesses £3.4bn.

Duty is so high that 56% of the average bottle of wine in shops and supermarkets is now taken by the Treasury in tax and VAT and an eye watering 76% of a bottle of spirits.

The UK alcohol industry is one of the most heavily taxed in Europe, with British drinkers paying an extraordinary 68% of all wine duties collected by all 28 EU member states and 27% of all spirits duties. This is by far the most of any member state despite accounting for only 11 per cent of the total EU population.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said:


“We are hearing very mixed messages from government. On the one hand Liam Fox is championing the importance of imports to the UK. At the same time Philip Hammond is revving up to hit us with a second inflation busting hike in seven months in alcohol duty – making the UK less attractive to importers.


"Don’t be fooled into thinking that when the Chancellor announces “no change” to alcohol duty plans that he is doing everyone a favour. No change means that duty on all alcohol will rise in line with RPI inflation which in March meant a rise of 3.9%. Next month we are set to see yet another 3.4% added to the staggering amount British consumers already pay in wine and spirit duty.


"Whether it’s English Vineyards, new start up distilleries, producers, distributors or retailers, there are hundreds of British businesses that will be hit hard by another such increase.

"This is why we are calling on our members to contact their MPs and ask the Chancellor to end these unpopular duty rises and support our great British wine and spirits industry. By freezing duty the Government can support British businesses and consumers and even help to increase revenue to the Exchequer.”

The WSTA is arguing that a duty freeze is not only beneficial UK wine and spirit businesses, but also to Government given recent evidence that rebalancing the UK’s unfair wine and spirits tax regime can actually lead to an increase in duty revenues.

HMRC figures show that following the freeze in the 2015 budget, wine duty income actually increased over the following year by £136m (+3.6%) and following the 2% cut to spirits duty that year it actually helped to increased revenues by £124m over the same period.

When spirits duty was frozen in 2016, revenues actually increased by 7% the following year.

Cunard luxury liner launches gin on tap as spirit lovers celebrate World Gin Day

Sales of gin in the UK have grown 12% in volume and 15% in the last 12 months (to 25th March 2017)

World Gin Day (10th June) coincides with an exciting first in the spirits world as cruise liner Cunard start serving guests gin on tap at sea this weekend.

To mark both these ‘gintastic’ events the Wine and Spirit Trade Association has compiled the latest British gin fast facts below.    

Pickering’s Gin has launched a unique collection of gins exclusively for Cunard’s three luxury liners – the Queen Victoria, Queen Mary 2 and the Queen Elizabeth.

To coincide with the £34 million refit of the Queen Victoria - which sets sail on its first voyage around the Mediterranean today (Friday, 9th June) - the ship has been installed with the very first draft gin tap, at sea, serving Queen Victoria Gin.

Pickering’s Gin has a shared history with Cunard as co-founder Marcus Pickering’s great-uncle George Gibbons CBE RD RNR, sailed as captain of Cunard White Star liners from 1909-1944. These ships included: The Majestic, The Aquitania (“The Ship Beautiful”) and the legendary transatlantic liner the Queen Mary in 1936.

Marcus Pickering said:

“Working with Cunard is a dream of mine and the ability for small companies like ours to work with a globally recognised cruising brand has been a revelation. It is proof that it is possible for David to play nicely with Goliath in such uncertain times, and deals like this really help to secure the future of our business. Being a small part of Cunard has delighted my family. I might not be steering the ship, but at least I can lubricate its passengers!”

Based at Summerhall Distillery in Edinburgh, Pickering's Gin, has created three new unique London dry gins one to complement each ship. To find out more about the bespoke Cundard see their press release here.

Chief Executive of the Wine & Spirit Trade Association, Mile Beale, said:

“Now that gin has well and truly proved that it is here to stay we are seeing fantastic new innovations in ingredients and serves. Advances such as the Pickering’s gin tap, on Cunard’s luxury liner, are a great way of showcasing to the world the excellence of British gin. The latest WSTA Market Report shows that consumers are willing to spend more for a quality gin experience. People have increasingly sophisticated palettes and are interested in the locality, provenance and authenticity of what they are drinking. Distillers like Pickering’s are producing and marketing their products to reflect this trend.”

The WSTA has pulled together a round-up of everything you need to know about British gin:

  • Gin sales in our pubs bars and restaurants (on-trade) have grown 12% by volume in the past year (ending 25/03/2017) to 56,000hls (8.1m bottles) worth £655m (+15% on last year).
  • Gin sales in the our shops and supermarkets (off-trade) have grown 12% by volume in the past year (ending 25/03/2017) to 242,000hls (34.6m bottles) worth £471m (+16% on last year)
  • Gin sales combined (both on- and off-trade) reached 298,000 hls in the past year (ending 25/03/2017) equalling 43million bottles, worth £1.1bn
  • The UK drank the equivalent of 1.12bn G&Ts in 2016
  • Gin sales have grown more than any other spirit sold in UK in the last year.
  • The UK hit its largest ever gin exports in 2016 - worth nearly half a billion pounds at £474 million.
  • The UK exports British gin to 139 countries around the world.
    • Since 2000, gin exports have increased by 73% and by value 166%.

  • The UK is the biggest gin exporter in the world. Half of all gin exports (by volume) go to USA and Spain.
  • In March, gin was added to the ONS’ typical shopping ‘basket of goods’ which is used to calculate inflation
  • The growth of gin has helped spirits duty revenues overtake that of beer and contribute more money to the Exchequer, a total sum of £3.4bn.
    • The UK saw a total of 45 new distilleries in 2016, an increase of 17%. Including 5 known licence cancellations in 2016, this brings the total to an estimated 273 distilleries in the UK. It is not known how many of these distilleries produce gin.
  • In the 2016 International Wine & Spirits Competition (IWSC) 96 gins from the UK won medals. This is up from 75 in 2015
  • Mary Berry enjoyed seeing a gin & tonic drizzle cake on GBBO
    • Lord Sugar recognised that gin was the “spirit of the moment” one he tasked his competitors with creating a new gin brand on the hit BBC One show, The Apprentice last year.
    • The popular BBC Radio 4 programme, The Archers, saw Toby begin distilling his own gin in November 2016.  
    • An averaged priced 70cl bottle of gin is £13.66, at 40% abv, £10.33 of this goes on spirits duty.

Subcategories

Twitter @wstauk

Great support for a fantastic local initiative from our members @BrightonGin https://t.co/DWnTo5in5v


English wine enjoying some great coverage over the bank holiday. Let’s hope this encourages people who haven’t trie… https://t.co/13quwMAqdO


RT @Ibwsslondon: David Richardson - Regulatory and Commercial Affairs Director from @wstauk talks about Bulk products, the constraints invo…

Connect with us