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Concha y Toro slams proposed alcohol duty changes as 'regressive step'

Published:  24 January, 2022

Leading Chilean brand Concha y Toro (CyT) has criticised the government for adding to the inflationary woes currently hurting consumers across the UK.

The firm has said that under the proposed reforms, CyT brands sold in the UK would incur at least an extra £28 million in duty levied on consumers each year.

This is equivalent to +29p per bottle of wine, an increase of 13% versus current duty (already one of the highest rates in Europe) and this before additional 20% VAT is added.

“As a leading wine importer in the UK, and one of the instigators of the Wine Drinkers UK lobbying group back in 2019, we know it is essential that government understands the full impact of the proposed changes to alcohol duty on the wine industry,” said Simon Doyle, GM at Concha y Toro UK.

“The government has stated that it does not seek to increase the total amount of duty revenue raised via the proposals. However our 96 million bottles of market-leading brands of wine sold in the UK each year have an average ABV of 12.9%, and most of the other leading still wine brands in the market are at similar or higher average ABVs.

“This is a regressive step versus consumer expectations of a lower-tax economy post Brexit. The Chancellor is proposing that we use Brexit freedoms to tax consumers’ favourite alcoholic beverage even more. These proposals are both unfair on consumers and unworkable for the trade.”

As reported by Harpers, the rationale underpinning the Chancellor’s reforms, unveiled in the autumn budget last year, is “the stronger the drink, the higher the rate”.

However, this move has been widely criticised by various stakeholders and interest groups, including the WSTA, and Accolade Wines.

According to the WSTA, under the proposed changes, a 750ml bottle of still wine at 12% will see duty increase by 10p to £2.33 in February 2023, when the changes come into effect.

By way of comparison, duty on a 750ml bottle of sparkling wine at 12% remains at £2.86 until 2023 when it will drop by 53p to £2.33. Meanwhile, duty on a 70cl bottle of vodka at 37.5% will stay at £7.54 and remain unchanged.

“Late last year, we were delighted to see the Free Trade Agreement come to life between the UK and Australia and New Zealand governments. The Free Trade Agreement is positive news for British consumers who will benefit from greater choice of wines from Australia and New Zealand at competitive prices," said Caroline Thompson-Hill, regional managing director, Europe, Accolade Wines.

“We are however concerned that the UK Government’s current proposal to increase taxes on alcohol – and specifically on wine – under the UK Duty Review will wipe out the benefits of these Free Trade Agreements. We are working with our partners and government to find a fair balance that will still allow people to enjoy a glass of their favourite wine in moderation without significant additional cost.”