Wine drinkers looking forward to the end of Dry January can also expect a sharp rise in the cost of a bottle as Labour presses ahead with its alcohol duty rise.
Prices of malbec, shiraz and cabernet sauvignon will go up after February 1 as a result of a new scheme that taxes alcohol based on its strength.
The duty had come into effect on August 1, 2023 but the Conservative government introduced a temporary reprieve for wines with a strength (ABV) between 11.5 per cent and 14.5 per cent, taxed at a flat rate of 12.5 per cent.
However, this weekend marks the end date for this temporary easement meaning wines with a higher alcohol content – typically from hot climates – will incur more tax.
Sellers have urged the government to reconsider saying the industry is suffering ‘death by a thousand cuts’ though the Treasury insists the changes represent a ‘modernised’ and ‘simplified’ system.
The vast majority of bottles on sale will be subject to 30 different tax bands with one band per 0.1 percentage point difference in alcohol content.
Alcohol duty will simultaneously rise by 3.6 per cent on February 1 and waste packaging recycling fees are set to come into effect in April at 12p a bottle.
The Wine Society says the industry had become ‘a target for legislators’, The Times reports.
Prices of malbec, shiraz and cabernet sauvignon will go up after February 1 due to a new scheme that taxes alcohol based on its strength
February 1 marks the end date for the temporary easement meaning wines with a higher alcohol content – typically from hot climates – will incur more tax (file image)
Hal Wilson, co-founder of Cambridge Wine Merchants, also asked whether the government was ‘unwittingly penalising high quality wine producers’.
He pointed out the Chateau Bel Air la Perriere 2022 Bordeaux Superieur and the Tapiz Syrah 2022 — both of which have an alcohol content of 14. 5 per cent — would rise by £1 to £11.99 and £14.99 respectively.
Miles Beale, head of the Wine and Spirit Trade Association, said the tax rises would exacerbate the decline in the sale of alcohol, and highlighted figures from HM Revenue & Customs that showed alcohol tax receipts fell by £209 million last year.
Meanwhile, some health campaigners have welcomed the change as they say excessive drinking can lead to a higher risk of brain damage, liver disease, dementia and forms of cancer.
An HM Treasury spokesman said: ‘The alcohol duty reforms have modernised and simplified the duty system, prioritising public health and incentivising consumption of lower strength products.’
