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UK winemakers lobby government to scrap “damaging” planned tax rises

Published:  08 October, 2018

Winemakers in England and Wales have banded together to try and convince the government to rethink plans for a duty hike that could hamper exports and stifle growth.

A total of 14 English wine producers have put their concerns in a letter to Chancellor Philip Hammond after it emerged that duty could rise 3.4% in line with inflation at the Autumn Budget on October 29.

In real terms, this would add another 7p on a bottle of still wine, 9p on a bottle of sparkling.

Around two thirds of the wine made in England and Wales is sparkling wine which attracts the most duty -£2.77 per bottle.

UK consumers pay £2.16 for a bottle of still wine.

Chris White, CEO of Denbies Wine Estate in Surrey and one of the letter’s signatories, called the action “necessary in order to support the current demand for English wine and the growth of the industry”.

“A duty freeze would also stimulate further our opportunity for export. We would like to see the government adopt a model employed in all other EU countries where the lower duty rate has helped support the growth of their wine industry,” he said.

Despite a freeze on duty last year, the already significant tax burden is restricting growth and damaging rural communities, the Wine and Spirit Trade Association (WSTA) said this morning – and the proposed duty hike is particularly difficult to stomach considering the Treasury is set to receive an extra boost when 2018’s bumper vintage goes on sale.

This summer’s heatwave means producers are expecting a larger than usual harvest in 2018, to add to the already increased yield accelerated planting over the past ten years.

“The English and Welsh wine industry is a bright spot of the UK economy which is set to flourish so long as the government provides a stable and supportive environment,” Simon Robinson, chairman of Hattingley Valley in Hampshire, said.

“Growth in the industry will provide significant rural employment and development as well as significantly underpinning developments in tourism. Increasing duty on our products is not helpful, especially when one considers the considerable additional revenue which will accrue to government from increased employment in the industry.”

In the last ten years the area of planted vines has more than doubled, with one million vines going into the soul in each of the last two years across England and Wales.

There are over 500 Vineyards in England and Wales and around 150 wineries producing almost 6m bottles of wine a year.