Wine is the nation’s favourite tipple and a great British success story – so why the sky-high tax?

Written by Peter Richards on 12 March 2015 in Opinion
Opinion
Without a cut in alcohol duty, Britain is a risk of losing its place as the historic hub of the global wine trade, says Master of Wine and BBC1’s Saturday Kitchen presenter

There are many things that make Britain great; one of them is booze.

I realize that sentence might jar a bit. It certainly seems to with politicians, who struggle with how best to deal with what can admittedly be a tricky topic.

We often hear about the downsides of alcohol misuse. How much it supposedly costs society, the health risks, crime, abuse, disorder and so on.

What we don’t often hear about is how the wine and spirit trade has also been a great British success story, with hundreds of years of proud history, powered by brilliant homegrown produce, supporting hundreds of thousands of jobs and enjoyed responsibly by millions (hard to quantify enjoyment, remember). And I just can’t understand why this isn’t celebrated and supported more by our government.

Take wine, my area of expertise. Some people think it’s a bit posh, or niche. Actually a recent survey showed it is now officially our nation’s favourite tipple, with 60% of drinkers choosing it first, including those aged 25-34. Pubs aren’t just about the beer these days: wine and spirits aren’t far off half of revenue in new openings according to the latest figures. 

Yet an average priced bottle of wine is now nearly 60% tax. The Government grab on your bottle of wine has soared by 54% since 2008. And, in case you think this isn’t too bad, or wine drinkers can take the hit, let’s put it in context: we UK tax-payers now pay the Chancellor more than two thirds of the entire EU wine duty collection. That’s 28 countries in all but we as just one nation stump up 67%.

It’s not fair, is it? That’s why I’m with the 64% of people in this country who think that alcohol duty is too high.

This budget, the wine and spirit trade are calling on the Chancellor to make a modest 2% cut in alcohol duty. Why? Well, partly in the interests of fairness, and supporting the responsible majority who enjoy their tipple sensibly. Overall alcohol consumption in this country is actually in long-term decline - down 18% since 2004 - and recent ONS figures revealed that fully 21% of British adults are now teetotal, up from 19% in 2005.

But also because research indicates that a cut in duty won’t decrease government tax take but will instead have the opposite effect: stimulating growth and increasing jobs and, in doing so, actually increase tax revenues in the longer term. A study by EY showed that cutting duty by 2% could create more than 18,000 extra jobs, stimulate the sector to the tune of £3 billion and increase tax take by £1.1 billion.

It’s a win-win situation: the Government needs to raise revenue and the country is desperate for an economic boost. This is one brilliant way to do it, while supporting a great British success story.

The alternative path could be disastrous. Continuing with a repressive and counter-productive tax regime could risk Britain losing its place as the historic hub of the global wine trade. Do you ever wonder why we have such a brilliant range of wines from all over the world on our shelves, while when you travel abroad it’s much more limited, even if usually a bit cheaper?

That’s because of Britain’s proud history as an importer of wine from all over the world. We didn’t make the stuff ourselves so we brought in the best from elsewhere. Over hundreds of years – the Vintners’ Company in London recently celebrated its 650th anniversary – we built a fine trade on the back of this. The wine industry (importing, bottling, distributing, sales etc) is worth around £17.3 billion, supporting 270,00 jobs and contributing £8.7 billion to the public purse.

But with tax soaring ever higher, the best producers are now starting to look elsewhere to sell their wine – to the booming US or Chinese markets, for example. Hong Kong, for example, abolished its 40% wine tax in 2008 and has since become a major wine trading hub.

That could mean in a few years that our shelves are much the poorer for it, with less choice, less value and a historic British legacy will have been lost.

What’s more, this is a time when we’re just starting to grow and make world-class English wine. Our top bottles are now regularly beating the competition – Champagne included – and it’s never been a better time to support a brilliant local industry.

This is no time for government to be beating wine with a big tax stick. Legislation needs to be responsible and in the best interests of the majority: so let’s keep Britain great and support a call for the government to do its duty come budget time.

Sources: YouGov, Populus, ONS, WSTA

Peter Richards is an award-winning Master of Wine and TV presenter. As well as running wine marathons, he also runs Wine Festival Winchester.

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