English and welsh producers celebrate end to sparkling ‘Super tax’

By Jo Gilbert

Published: 27 October, 2021

The news that the duty premium on sparkling wine being sold in the UK has been removed has been met with encouragement from the English and Welsh wine sector.

In today’s announcement, Chancellor Rishi Sunak brought relief to many in the sector who were hoping he would proceed with plans to eliminate what has been widely seen as unfair additional tax on sparkling wine. Sunak announced the end of the “irrational duty premium of 28%” in his Autumn Budget and now, sparkling wines being sold in the UK will attract the same rates as still.

Chapel Down CEO, Andrew Carter, said introducing duty parity for still and sparkling wine will ensure the UK is competitive to international markets.

“English wine is a 21st-century success story and demand for Chapel Down’s award-winning sparkling wines has never been higher. It’s very encouraging to see the support and recognition of the industry’s success at a governmental level, which is the best endorsement we could hope for.”

Nick Heasman, a countryside policy manager for the South Downs National Park Authority, one of the UK’s biggest producers of sparkling wine, said: “The South Downs is rapidly gaining a reputation as Britain’s premier winemaking region and this cut in duty is fantastic news for the region and producers of our wonderful sparkling wine.

“We’re looking towards a low-carbon future and this is a good opportunity for people to enjoy local wine produced right on their doorstep.”

A spokesperson for Wine Drinkers UK said: “We welcome the cancellation of the planned increased in all alcohol duty and the government’s long overdue decision to abandon the ‘super-tax’ on sparkling wines.

“On the proposed wider reform of the alcohol duty we await clarification from HM Treasury in the coming days. We hope this will put a stop to the historic unfairness of favouring one drink over another.”

Some however, were more tempered in their optimism. Matthew O’Connell, director at Bordeaux Index and CEO of LiveTrade, said it is difficult to justify the premium per unit applied to wine versus beer, adding that change in duty will be negligible at the very top.

“Fixing the specific anomaly that people were overtaxed for celebrating with fizz rather overlooks the broader issue that both wine and Champagne should be brought level on a per unit basis with beer.

“Coming out of lockdown demand for Champagne has been so strong – especially in the super premium segment such as Cristal, Krug, Dom Perignon and Bollinger Grande Annee – that we saw some market prices on our LiveTrade fine wine trading platform increase by over 10% in September alone. The change in duty will make negligible difference to drinkers of the very top wines, but it will at least offset somewhat the upwards price pressure on the more everyday celebration fizz.”

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