On Budget Day in March, there’s a fair chance that the Chancellor George Osborne will tell MPs that there will be no extra duty on wine.
You’ll think “BRILLIANT!” and “TREBLES ALL ROUND!” Except it really isn’t good news for wine lovers.
What he’ll actually mean is that there will be no extra duty on wines and spirits on top of the duty escalator which automatically increases duty by 2% above inflation every year.
Tax on wine has increased by 50% (and on spirits by 44%) since the escalator was introduced in 2008 by the previous government and, unless George Osborne can be persuaded to scrap it, it’s is about to go up again.
But don’t feel powerless, as there’s a strong precedent for scrapping it. Last year he abolished the duty escalator on beer after heavy lobbying by the industry and, in the last quarter of 2013, retail beer sales increased by almost 4%. It was the second consecutive quarter of growth – the first time the beer industry has seen that in a decade.
Of course, as an independent wine retailer, it is in my interest to see this unfair annual increase in duty scrapped. It makes it increasingly hard to source and offer good wines under £10.
But, as a consumer and a wine lover, I also feel unfairly penalised.
On a £5 bottle of wine, 57% of the cost now goes on VAT and duty. Then there are bottling, shipping and marketing costs, meaning the wine in the bottle is worth less than the fizzy, sugary water in a can of cola.
WSTA – the body representing the wines and spirits trade – has stepped up its campaigning this year with a Call Time on Duty initiative. It includes a website letter you can send to your local MP, which took me just a couple of minutes. I also received a reply from my MP confirming he will raise my concerns with the Chancellor.
I’ll be keeping my fingers crossed until 19th March, budget day.
Paola is the owner of Park+Bridge