CHANCELLOR George Osborne confirmed plans to scrap the alcohol duty escalator in last month’s Budget, meaning wine duty is set to rise by RPI inflation (2.5%) rather than the expected 4.5%.
Here’s how wine suppliers reacted to the announcement:
“The news that the duty escalator has been scrapped is a very positive development. However, given that we have had many years of rises above inflation, I still feel that the duty on a bottle of wine is too high and it would be good to see a few years of duty freezes to bring it back in line with where it was before the escalator was introduced.”
– Toby Sigouin, Inverarity Morton
“I think the industry should be thankful to George as the last thing we need is further high increases on wine duty. Currently on a £5 bottle, half goes to the chancellor with the other £2.50 being split between the grower, bottler, transporter, dry goods (label/cork), storage, finance, UK handling costs and at the very end a modest margin for the wholesaler.”
– Billy Bell, Wine Importers
“Well where to start on the Budget? It could have been a lot worse so we have to be glad of that. The hardest point for businesses is passing on the increases as customers don’t want to pay more. This is where working well with your suppliers to strike a deal on support that benefits both parties is crucial.”
– Leslie Somerville, Enotria
“Scrapping the duty escalator on wine is a good thing for consumers but will have minimal effect on the wine category as a whole. As a wine supplier, it would have been nice to have duty frozen (like spirits) but it appears annual duty increases are here to stay so we will continue to plan around this.”
– Paul Graham, Alexander Wines
“Duty increases are just making wine more expensive and cheaper wines less good value, thus adding to the argument to trade up, spend a bit more and drink better, more interesting wine.”
– Matt Sullivan, Alliance Wine
