The rise in wine duty Unwelcome, but is it all bad news for indies?

Three merchants offer different perspectives on the August tax hike

of “a deeply depressing situation for more than one reason”.

He calculates that, as a wine merchant, he is paying 14 types of tax, personally and professionally.

“When we were part of the EU, Brussels made a recommendation that fellow members stopped charging and paying excise duty between each other by 1999,” he adds.

But the UK government has usually increased wine duty with every Budget, raising “a few pennies” in the process but adding disproprortionately to the costs of the wine trade.

“Merchants, importers and bonded warehouses have an unnecessarily onerous task of recalibrating computers, printed lists and physical pricing,” Meyer says. “Whatever the increase is, any change simply costs us more time and money on top of an already onerous and timeconsuming system.”

Tuggy Meyer Huntsworth Wine Co, London

For Tuggy Meyer, “44p or any increase is a slap in the face because we pay excise duty on the wines almost immediately,” he says.

He points out that both duty and VAT on any corked or damaged wines is always money lost.

“Yes, technically we can reclaim it but that is a bullshit position because the bureaucracy involved to genuinely reclaim is – deliberately – so time-consuming that it is a pointless and actually detrimental exercise,” he says.

“This is solely about revenue raising and any pretence about health or healthier aspects are sadly just that – pretence. We lag behind our Continental cousins and this is a major contributory factor as to why that is the case.”

Meyer argues that, below £10 a bottle, “the customer is getting an atrocious return on their wine”.

“In Europe you can easily buy a drinkable wine at, say, €8. By contrast, a £7.50 wine correctly priced in the UK is probably less than €1.50 of actual wine.

“In Europe, moderate drinking is typically viewed as a reasonable healthy option but in the UK it is viewed as detrimental to one’s health, and the taxation as it is simply compounds this.

“We have one of the most sophisticated wine import markets in the world. Yet the vast majority of wine drinkers in the UK are typically drinking often chemicallyfilled crap.”

Meyer believes the new duty hike is part

Meyer dismisses the idea that the current duty increase will be more problematic for lower-priced grocery channel wines than it will be for more premium wines in the independent trade.

“Disproportionately hitting the supermarket wines means we simply continue the ill-education of wine drinking for most UK drinkers,” he says.

“Multiples will not change their pattern as they are more than happy to use certain wines as loss leaders, such as the almost perennial half-price Ogio Pinot Grigio or

Dom Pérignon at less than cost, to gain unpaid news advertising.

“It will not benefit independents in the slightest because, to be brutally honest, the typical wine-buying Tesco customer will almost never buy from an independent. If you doubled the tax or halved it, I do not see any noticeable shift at all.”

Chris Piper

Christopher Piper Wines, Ottery St Mary, Devon

“Supermarkets may ask their suppliers to fund the 44p”

Chris Piper is not opposed in principle to higher tax on wine. “The fixed 44p duty increase is necessary to help contribute towards education, health et al,” he says.

“I agree that it will mean that the supermarkets and high street outlets will have to pass this on and maybe this will benefit us independents, selling more expensive wines.

“However, I do have a caveat which is that the supermarkets may well turn to their suppliers and ask them to fund the 44p through cheaper prices. This will have the effect of seriously damaging some overseas suppliers and also their agents and importers in this country.”

Daniel Grigg Museum Wines, Dorset

He adds: “There will be a knock-on effect in the on-trade where restaurants and pubs slavishly stick to fixed percentage margins, and we will see prices in some establishments rise by anything between £1.25 and £1.50 per bottle.”

Piper is also waiting for more clarity on the new duty system for wine that is due to come into force at the same time as the duty increase.

“It’s very annoying that we are talking about this when we don’t really know how the government is going to implement it,” he says.

“The already onerous paperwork that importers and merchants like us are experiencing will be ratcheted up even more. Maybe we could have a proper briefing from HMRC about how this is going to work – and then we can react accordingly.”

How each category’s duty will change on August 1

Daniel Grigg believes that the Chancellor’s duty increase is worse news for supermarkets than it is for independents.

“I think that wine has been too cheap for too long,” he says. “If it takes a 44p duty increase for people to familiarise themselves with spending a bit more on wine then I don’t necessarily think it’s a bad thing.”

He argues that consumers will be more likely to notice a 50p increase on a £5 or £6 bottle of wine – and to question the value it represents – than they will further up the price ladder.

“If a wine goes from £40 to £40.99, then who cares?” he says.

“I would rather the extra money went to producers. But if it gets people spending a bit more on wine then it can only be a good thing for independent wine merchants.

“We haven’t had a duty increase for three years, so if you think of it being 14p a year, it’s about where we would have been anyway.”

Katia has been in charge of winemaking at Martín Códax since 2005, 20 years after its creation in Rías Baixas. She’s an engineering graduate who went on to obtain a degree in wine production, gaining practical experience around the world before returning to her native region in north west Spain.

Published in association with Enotria&Coe

Martín Códax Lías

From hand-harvested grapes in selected plots that we refrigerate before whole-bunch pressing to obtain a much more concentrated must with huge aromatic potential. The wine undergoes eight-month lees ageing, resulting in an intense, complex Albariño. It is a dense and glyceric wine that is very gentle and long and pairs really well with white meats and poultry.

Mara Moura

We select plots in altitude with granite and schist soils to make a very fresh, complex Godello. The wine undergoes ageing on lees in stainless steel which translates into a fuller body with structure and intensity. We also add a small percentage of Treixadura to increase aromatic complexity.

Mara Moura is a reflection of the diversity the Monterrei DO can offer, showing an intense, complex and modern profile.

Cuatro Pasos Black

The grapes are from Otero de Toral, Valtuille de Arriba and Villafranca del Bierzo. These sloping, bush-vine vineyards are more than 80 years old. Slate soils in Otero de Toral bring freshness, while the deep clay soils in Valtuille de Arriba and Villafranca del Bierzo contribute volume and maturity. The ageing is done in 225-litre French barrels for nine months. The result is a complex and elegant Mencía, with varietal character and very well integrated tannins.