The English wine industry has the potential to ‘follow in the footsteps of New Zealand’ but is being crippled by high taxes, according to producers and trade bodies lobbying for a Budget duty freeze.
English wine producers have called out a ‘lack of support’ for the industry in a letter to the chancellor Philip Hammond and environment secretary Michael Gove calling for a freeze on wine duty. It is signed by 11 Wine and Spirit Trade Association (WSTA) English wine members who say the tax burden is restricting growth.
Wine duty increased by 3.9% in March, adding 8p to a bottle of still wine and 10p to sparkling. It is expected to rise again, this time by 3.4% in the November Budget adding another 7p to still and 9p on to sparkling.
‘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,’ said Mark Driver, founder and owner of Rathfinny Wine Estate with his wife Sarah. ‘In fact it’s the most harshly treated of all alcohol categories.’
‘We find it difficult understand why the chancellor insists on continuing to tax so heavily this great British product,’ added Sam Linter, managing director and head winemaker at Bolney Wine Estate. ‘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.’
The WSTA said the rapid spread of English vineyards making top quality wine is similar to where New Zealand was 30 years ago in the comparative size and the success of its wine industry. However, wine duty in New Zealand is around £1.18 per bottle of still or sparkling wine, compared to £2.77 for English sparkling and £2.16 for still wine.
‘The UK has the potential to follow in the footsteps of New Zealand’s trailblazing wine success story, yet the industry is being held back by the staggering amount of duty it has to pay,’ said Miles Beale, chief executive of the Wine and Spirit Trade Association. ‘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 homegrown industry and freeze duty in the November Budget.’
There are currently estimated to be over 500 vineyards in England and Wales, with around 150 wineries producing five million bottles of wine a year.