Autumn Budget should add some sparkle for UK wine growers

3 Nov 2021

credit card and big ben

The Chancellor’s Autumn Budget, delivered on Wednesday 27 October, may have lacked in headline grabbing announcements and changes to policy, but there were some welcome tweaks to alcohol duty which indicate support for the UK’s wine making industry.

Peter Harker, a partner and member of the firm’s Landed Estates and Rural Business Group comments that some of the announced changes would be welcomed by vineyards and winemakers alike:

“Firstly, a freeze on the duties levied under the current system in respect of wine, spirits, beer and cider was encouraging – although the full details relating to the proposed changes are yet to be fully announced. The planned increases in duty – now shelved – would have raised estimated tax revenues of £3 billion which the Treasury has chosen to forego.

“Secondly, it was recognised that the consumption of sparkling wine has doubled in the last decade. Even more encouragingly, the increase in consumption of sparkling wine from the UK’s vineyards, many international award winners among them, has increased tenfold. The Chancellor announced that the ‘irrational’ 28% duty premium levied on sparkling wine would be coming to an end. This will apply not only to sparkling wine produced in the UK, but also to imported products like champagne, prosecco and cava. It has been cited that the impact of this change will result in a reduction in duty payable of around 64p per bottle of sparkling wine. This isn’t much for consumers, but the benefit will be significant for large winemakers, whose annual duty bill can be a relatively substantial cost of production.

“This change will remove the existing mismatch of duty on wine and could mean that more consumers engage with locally produced wines. Whilst the change will apply to all sparkling wines, it’s encouraging to see the Chancellor also recognising the significance of the wine industry in the UK.

“With this additional fillip we look forward to seeing UK vineyards continue to build on their success.”

The Wine and Spirit Trade Association (WSTA) has previously estimated that UK wine and spirit businesses generate around £60 billion per year towards the UK economy.