Prices on Port and Sherry could increase by around 13% in the UK if the government presses ahead with its duty tax reform as planned, according to industry leaders.
Producers and merchants have been left incensed by the plans, said the Wine & Spirit Trade Association (WSTA) today (9 December), following a meeting with members connected to fortified wine.
‘If you like a glass of Port or Sherry at Christmas we suggest you make the most of it this year [because] it might be priced out of your Christmas shop in the future,’ said Miles Beale, the WSTA’s CEO.
Industry bodies recently praised the government for freezing duty tax on alcohol, but there has been rising disquiet in the wine trade about duty tax reform. A key tenet of the new ‘simplified’ system would be the basic principle of ‘the stronger the drink, the higher the rate’, ministers have said.
Sparkling wine would see its tax burden reduced but some other wines could see their tax bill rise. A government consultation has opened on the plans, which would be implemented from February 2023.
‘I do believe that the politicians drawing up these proposals have no intention of damaging the fortified category, but if the proposals remain unchanged it will result in the retail price of a bottle of Port increasing overnight by £1.09,’ said Steve Moody, MD and chairman of importer Fells.
‘That’s an immediate increase of more than 13%,’ he said. Fells imports Symington Family Estates Ports, such as Graham’s and Dow’s, as well as Blandy Madeira, Pellegrino Marsala and Barbadillo sherries.
Andrew Hawes, MD of importer Mentzendorff, said, ‘Local wine merchants up and down the country are aghast at the suggested tax rises which will see their popular Port and Sherry brands, such as Taylor’s and La Gitana, take on the largest single alcohol tax rises in UK history.’
Melissa Draycott, MD of González Byass UK, said, ‘As passionate producers we have been working hard to pass on the sector’s rich heritage and introduce a new generation to the joys of a beautifully crafted Sherry, through its use in lower alcohol cocktails or served alongside food.
‘However, the proposed duty rise would create a significant barrier to purchasing this festive favourite which has enjoyed a strong role in British culture for centuries.’
She added, ‘Although Port and Sherry have a higher abv than wine they are traditionally enjoyed in smaller measures on special occasions as an aperitif or at the end of a meal.’
Port sales at retailers in the UK – the so-called ‘off-trade’ – were set to rise by 4% in 2021, to 8.8m bottles, the WSTA said.
The consultation period for the proposed duty reform ends on 30 January.
Introducing the consultation document, Helen Whately MP, exchequer secretary to the Treasury, wrote, ‘The system we are setting out today represents a pragmatic balance between the social, economic and fiscal considerations that affect alcohol duty.’ She said the proposed system was based on logical principles.
In particular, the government has been keen to highlight its efforts to support pubs and the wider hospitality sector. Final plans were due to be set out next year.