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Insights: Beyond the duty easement

Euan Mackay

MD, Fells

“We are particularly disappointed that the new government did not heed the advice of the industry, despite all our efforts, which will result in the removal of the duty easement as well as an additional increase of 3.65% in duty from February 2025. These increases will not only mean higher retail prices for the consumer but will also add significant complexity and costs to an industry that is already facing significant challenges.

“In truth, there is very little we can do. This will add significant costs to nearly all the wines that we sell. We will, of course, continue to seek efficiencies where possible and endeavour to offer great value as well as the best possible customer service – but beyond this our options are somewhat limited.”

Fergal Tynan MW

MD, Alliance Wine

“Duty will be a significant factor pushing for lower alcohol in entry-level wines. To an extent there is more interest in lower-alcohol wines in general, but it’s not yet clear just how significant this will be. Given the high costs of wine now in this market, quality will still be the main determinant of success. Classics are certainly outperforming esoterics just now, which is probably a turnaround on the previous long-term trend in the UK market. Value is likely to be an even bigger consideration this year at all levels.”

Emma Kamel

General manager, Naked Wines UK

“The government’s Budget is going to have a big impact on retail and consumer businesses of all sizes. The big increase to alcohol duty has created an unhelpful challenge for the wine and spirits industry as a whole. We’re working hard to limit the impact of increased costs on our members while ensuring we don’t put undue pressure on our winemakers. Striking that balance is essential – this has to be fair for everyone.”

Jamie Avenell

Wine trading director, C&C Group

“From our perspective, it would be lovely to see some changes that make the UK wine industry easier to work with and more attractive as a market for our producers, rather than more of the opposite. The UK risks its position as one of the most exciting to sell wine by making it such hard work.

“Since the changes to wine duty were announced, we’ve had robust plans in place to prepare for them and we’re preparing to put comprehensive systems in our depots to be able to handle abv changes.

“The impact has also clearly been a hot topic of our conversations with suppliers this autumn and we are working with them to ensure they understand the new rules to make certain that we mitigate any negative impact.”

Mark Roberts

Director of sales, Lanchester Wines

“The massively draconian alcohol duty measures scheduled for 1 February were a real sucker punch to both the trade and consumers alike, at a time when the cost of living is high. Low & no is a fantastic trend and there are some truly great examples of wines, spirits and beers in the market that are driving this category, [but] lowering the abv of a product purely to reduce duty is not the same and shouldn’t be treated as such. Before the end of 2024, I’d like to see a greater understanding that, yes, abv and the resulting duty are important, but the quality and value of wine must be first and foremost.”

Nic Rezzouk

Buyer, Reserve Wines

“We will create a heat map of sales against alcohol levels and see where our revenues are against this metric. We were planning on consolidating our range further to help with processing efficiencies and concentrating volume sales, so this might influence where the cull takes place. We might bring forward a bit of stock in January but only on a couple of volume lines where it makes sense. The rest will consist of repricing everything and again looking at where our products end up with their rrps. Then we will have to see if that makes sense for our customers, while their perception of value once again adjusts to the new reality.”

Stefan Neumann MS

Wine consultant

“Pre-purchasing stock where possible at old duty rates has proven to be a good way of softening the impact. Of course, this comes with the upfront cost and potential strain on cash flow. I am also trying to integrate more low-alcohol wines/drinks into the business which are less affected by the duty increase. Other challenges, like premiumisation and more budget-friendly options, push your buying and consultancy team to think outside the box and maybe make them reconsider certain regions or grape varieties.”

David Archibald

Sales director, Cachet Wine

“The new duty scheme has also taken up an inordinate amount of time that would be best spent on more interesting and productive projects. Our winemakers in cool-climate regions have been successfully working to keep the alcohol levels down to 11% abv. This has been easily achieved without compromising quality in both south west France and northern Italy for white wines.”

Matt Tipping

CEO, Jeroboams

“We have to pass on the rises, which is going to add to inflationary pressures for the industry.

“However, for wholesale customers we have put significant time and effort over the past 12 months into making sure the entry points in our range are within the correct alcohol bracket in the new regime. We are also working with those producers to minimise any significant mid-year changes to alcohol levels.”

Vanessa Stoltz

Head sommelier, Restaurant Pine

“The benefit of focusing on a smaller wine list and British wines is that I am currently in a safer spot. However, as the government says, ‘the duty system reflects modern drinking practices’. Therefore, I will focus even more on my Teetotalist non-alcoholic drinks selection, which has already grown this year.”

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