Wine, spirits, duty and politicians

Yesterday it was announced that the wine has become the nation’s favourite tipple and also marked the launch of a new campaign against the fiscal treatment of wine, a campaign called “Wine Drinkers” aimed, like its name says, to wine drinkers.

Duty has always been an easy way for any Government to raise finances, often hidden and justified, as a deterrent to the binge drinking culture or to alleviate the financial impact on social services, police and the NHS. The duty doesn’t just affect wine, it touches all alcoholic drinks, based on their alcohol content, and until last year, they were all considered as one. This was until last year, when the Chancellor decided to freeze the beer and spirits and increase the duty on wine, currently, the duty for a 75cl bottle of wine stands at £2.23. Wine drinkers are also paying a 20% VAT on the duty element of the cost, a tax on another tax, which amounts to 44.6p; a considerable amount of money.

I believe the real reason for last year’s change is that the UK has a bigger tradition in these two industries, wine is still a very small industry despite growing year on year, so beer and spirits are considered national industries and therefore needs protection. Wine, on the other side, is mainly imported and can be “penalised”, even more now that Brexit has been voted. It could be argued that last year shift is a form of protectionism.

At the same time, another agenda has been published from the Spirits industry, backed by some of the biggest spirits companies, asking the Chancellor to review the duty system in its entirety.

These are turbulent times and until Brexit is sorted, one way or another, I don’t think the government would have much time to listen to the two groups, however, if we were to go to elections and to me this is what these two organisations are forecasting, the whole emphasis will change, and I ‘m certain there would be plenty of politicians and parties happy to sit down with them and listen to their concerns. At first impression, we may think that the campaigns were launched at the wrong time, but if you believe like many others do, that there are good chances of going to elections soon, then, it could not have been a better time.

It will be interesting to see what happens now that the groups are working separately and using a different approach, whilst the spirit industry is working behind the scene, the wine industry is not, and using a different approach, the wine group has decided to go public and involve wine drinkers in the hope of making a bigger impact. On the other side, the spirit industry, due to their size in terms of employment and economic value, has decided to stay behind the scene and use all their weight to get things done.

This is a life changing moment for the whole country and both campaigns are trying to use the Brexit factor to their advantage, will they succeed? Would the new approach for the wine industry pay off? Only time would tell, but lowering and restructuring the duty system in its entirety, and replace it with a new, fairer system can be achieved, and will allow all of us, conscious wine, beer and spirits drinkers to spend less when purchasing alcohol.