Rathfinny Wine Estate

Taxing issues

Dear Mr Hammond

Is it fair or wise to penalise a British industry that is growing and taking on the world? Would we charge higher taxes on Whisky or Scottish woolens than on Vodka or Chinese jumpers? Would we charge higher VAT on British made luxury cars than lower priced ones?

So why do we charge higher rates of Excise Duty on sparkling wine than still wine in the UK?

It’s a little-known fact that we pay 28% more of Excise Duty per bottle on sparkling wine than on still wine – £2.74 and ‘just’ £2.16 respectively. Plus VAT of 20% …

I say ‘just’ because in the rest of Europe Excise Duty on wine is generally 8-10p per bottle! It’s cheaper to buy most wines, even English wines, in Europe than in the UK.  In fact, the UK consumer pays some 66% of all Duty paid in the whole of the EU area.

The English sparkling wine industry is going from strength to strength, creating hundreds of high quality skilled jobs in the rural community, winning international awards and gaining an enviable reputation for quality. New markets are opening up for these quality wines both here and abroad and the wines are increasingly replacing similar premium sparkling wines, like Champagne, on wine lists, so helping our balance of payments.

It doesn’t even make sense from an alcohol perspective; most sparkling wines are 12% ABV whilst many still wines have alcohol levels in excess of this at 14% or even 15%. Someone recently told me it was a ‘carbon tax’. But carbon dioxide is a by-product of fermentation, so the higher the alcohol level the more CO2 produced.  Sparkling wine producers just store some of it in the bottle for your pleasure!

So why penalise this new and exciting industry? Why not simply harmonise the rates of duty charged on still and sparkling wines and end this anomaly?  The downside is that you might be forever known as the ‘Champagne Chancellor’. However, the upside will be that you can hold your head high and say you’ve done something to help our domestic wine industry. And, so what if the headlines read ‘Champagne Phil’ it might even hide some other less favourable headlines!

Please don’t read this as an excuse to raise still wine duty. As shown, we already pay some of the highest rates in Europe and if you raise them with inflation as in previous years, we will be paying the highest Duty rates on sparkling wine in Europe!

So please #FreezeDuty and #HarmoniseDuty on still and sparkling wine.

Thank you

Mark and Sarah Driver

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COMMENT ON Mark'S ARTICLE

  • A very good point well made. We live in the North Downs area of East Kent where the fastest growing crop on our fields locally is vines. These are producing some truly beautiful sparkling wine, which sadly are too expensive for a lot of people to buy much of, and yet the quality is world class.
    We need the UK to compete on a fair basis in order to maximise this very successful growing industry.

  • Yes another tax anomaly. Interesting to think we could buy English wine/sparkling wine in other parts of Europe for less money!

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