The commerce organisation representing Britain’s wine and spirits industry has urged Chancellor Philip Hammond to not raise the duty level on wines in next week’s Budget.
The Wine and Spirit Trade Association (WSTA) says a duty rise would put further risks on an industry that already contributes almost £10bn to the UK economy, despite facing a “tough trading landscape.”
Wine duty has already risen by 28% since 2010 and the Chancellor is expected to announce a further rise of 3.8% in his forthcoming Budget. Last year, the tax raised £4.7bn for the Treasury, more than any other alcoholic duty.
The WSTA claims a duty rise would be bad for business that would disproportionately affect small businesses and importers. As such, it is calling on Philip Hammond to extend the duty freeze on wine from last November’s budget.
Miles Beale, WSTA’s chief executive, says Chancellors have unfairly treated the wine industry for too long: “We are now telling the Chancellor that enough is enough. He needs to lend the world leading UK wine industry his support.
“We welcomed a freeze from Philip Hammond last year, but there is so much more that needs to be done to unpick decades of unfair treatment and above-inflation rises, often inflicted while other, less popular alcoholic drinks enjoy more favourable treatment.
He added Brexit is already causing trouble for the wine industry, because the weakened pound has caused the cost of wine imports to increase. The sector is highly reliant on imports; 99% of wine consumed in Britain comes from abroad, according to the WSTA.
Beale believes a further duty increase would compound the industry’s difficulties: “We have heard talk over the past 18 months of ‘taking back control’ – In this case, the government should exercise the control it already has, and show some support for our wine industry and freeze duty rates.”
Miles Beale was recently interviewed by The Manufacturer’s Editorial Director, Nick Peters. He addressed the multiple concerns Brexit is causing the wine and spirits industry, and highlighted recruitment in particular.
“If you’re an English vineyard, you absolutely need seasonal workers,” said Miles. “A couple of our members have tried to use UK-based workers and they just aren’t good at picking fruit, and there is no one left from the previous generations who used to do it.
“We therefore use fruit pickers who come over from mainly Eastern Europe, picking different fruits at different times across the rest of the EU.”
He said a workable transition agreement would help address the matter in the short term while a visa scheme for seasonal workers would solve labour issues in the medium term.
The government have announced a pilot visa scheme that will allow up to 2,500 workers a year to work on British farms. The initiative is set to commence in spring 2019; but the National Farmers’ Union believes this will lead to labour shortages.
The WSTA says the British wine industry is experiencing an immense boost in production and sales as a result of a bumper harvest. Recent data from HMRC found that 3.9 million bottles of English and Welsh wine were released onto the market last year – a 64% increase on 2016.
Despite the worries caused by Brexit and the forecast tax increase, Miles Beale has described 2018 was a “fantastic year for British vineyards”. Speaking to The Manufacturer, he noted that English wine growers were “ecstatic thanks to a very good spring with a nice amount of water, followed by a fantastic summer, [the] perfect for growing the grapes.”
Adding: “In each of the past two years there have been over a million vines planted, possibly 1.5 million in the last year, which means that the highpoint of 6.3 million bottles of 2014 looks almost certain to be beaten this year.”
Reporting by Harry Wise
