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Sussex fizz in Budget 2021 win

Pinot noir grapes at Stopham Estate near Pulborough

There’s good news for English wine producers in Chancellor Rishi Sunak’s Budget statement revealed on Wednesday, writes Nick Mosley.

Following a radical overhaul and simplification of the alcohol duty system there will now be six rates instead of 15, with rates based on the strength of drinks.

Duty on sparkling wine will be levelled with that of still wine, saving 63p on every bottle of sparkling wine and providing a direct benefit to English and Welsh sparkling wine which accounts for some two-thirds of Britain’s annual production. This ends the duty premium of 28% currently paid on bubbles over still wine of a similar or equivalent alcohol level.

“Sparkling wines wherever they are produced will have the same duty as still wines of equivalent strength”, said the Chancellor in his statement.

With a nod to an understanding of the economic challenges that the emerging English wine industry faces, the Chancellor explicitly referenced the benefit to the country’s wine producers.

“Growing conditions in the UK typically favour lower strength and sparkling wines, this means that English and Welsh wines compared with stronger imported wines will now pay less”, said the Chancellor.

Wine GB – the UK’s national wine marketing organisation – has been working with MPs for a number of years to ensure that the English and Welsh wine industry is recognised at governmental level.

Although Wine GB recognises that the duty change won’t be of immediate benefit to local sparkling wine producers – the reduction doesn’t come into effect until February 2023 – it will allow them to plan their long-term investment.

“We are delighted by the Government’s decision to equalise the duty between sparkling and still wines,” said Simon Thorpe MW, chief executive of Wine GB.

“This reform will have direct benefit to English and Welsh sparkling wine which accounts for some two-thirds of Britain’s annual production and will undoubtedly help to underpin our ongoing growth as one of the UK’s most exciting and fast-growing agricultural sectors”.

“It will help us to develop wine tourism, employment and R&D initiatives and build towards a long term economically sustainable industry.”

Tom Flint of Bottle & Jug Dept in Worthing (credit Jenni Helin)

Independent wine retails in Sussex have welcomed the announcement.

“This is fantastic news for our local wine industry, bringing duty on sparkling wines in line with still wines”, said Tom Flint of Bottle & Jug Dept in Worthing.

“This gives English producers the opportunity to price more competitively with the big Champagne houses and invest in their businesses”.

With the festive season being the busiest period for independent vintners, there is an edge of disappointment from business owners that they won’t be able to take advantage of the price drop this year to help with post-Covid recovery and encourage consumers to look closer to home when selecting wines.

Henry Butler of Butlers Wine Cellar in Brighton (credit Hanson Images)

Henry Butler of Butlers Wine Cellar in Queens Park Road and St George’s Road in Brighton is the city’s longest established vintner.

"This is great news for English and Welsh producers”, said Henry. “As has been pointed out by the Chancellor, the higher sparkling wine duty rate is irrational. UK still wines should also benefit, when the duty rate changes based around % strength, as they are mainly around 12%”.

“However it would have been nice to see this change applied immediately, to help the trade during the run into Christmas”.

It’s not all good news for drinkers though as stronger wines – notably red wines that tend to have a greater alcohol content than sparkling and still white wines – are due for a tax increase. Robust reds over 12% will see an additional 47p added to their price from February 2023. Fortified wines including Spanish Sherry and Portuguese Port will also see considerable price rises.

“Higher strength drinks will be penalised”, said Henry of Butlers Wine Cellar. “Affordable European red wines which happen to be 15%, might not be feasible retail option for businesses such as ours moving forward”.

It’s not all good news for the UK’s craft beer producers either. Tom from Bottle & Jug Dept said that small local brewers and cider makers aren’t likely to benefit from a cut in duty of 5% on draught drinks as this applies to kegs over 40 litres which are typically only used the big breweries. Smaller producers tend to use 30 litre kegs so won’t benefit from the tax reduction.

“It’s a shame that our local independent craft beer and cider producers didn't get support”, said Tom. “The government are giving handouts to the larger international brewing corporations rather the smaller guys who are producing the most interesting beers and cider”.


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