Wine drinkers face higher prices and less choice, firm warns

Proposed changes to alcohol duty will lead to higher prices and less choice for wine drinkers, the owner of wine merchant Laithwaites has warned.

The proposals, contained in October's Budget, were described by Chancellor Rishi Sunak as the "most radical simplification of alcohol duties for over 140 years".

But Direct Wines said the complexity would be "crippling" for the trade.

It said small and medium firms would "probably go out of business".

In the Budget, the chancellor said that under the new system for alcohol duty, which is due to start in 2023, taxes on sparkling wine, draught beer and cider would be cut, but would rise for stronger drinks such as red wine.

According to the Wine and Spirit Trade Association (WSTA), 80% of white wines will face a duty hike, while 90% of red wines will come under a higher rate of tax.

The government's consultation on the proposals has just closed.

Speaking to the BBC's Today programme, the treasurer of Direct Wines, Tim Curtis, said that under the present system there were three rates of duty on wine: one for still wine, a slightly higher one for sparkling wine and a higher one for fortified wine.

"So it's just three numbers and the majority of still wines sold in the UK, it's £2.23 a bottle, it couldn't really be much simpler," he said.

"But the Treasury have had a go and they've created 13 wine bands for the same £2.23, so for every half a percent of alcohol increase it goes up about 10p per bottle and above the 15% threshold there's another 14 bands so really they're replacing three with 27."

The WSTA has calculated implementing the changes would result in an increase in costs of about £250m a year for the wine trade.

"The complexity for the wine trade... is crippling," said Mr Curtis.

"Wine is an agricultural product and the ABV (Alcohol by Volume) of wine is set by the amount of sunshine warmth in the vineyard when the grapes grow on the vines and that changes every year.

"Last year we sold over 7,500 different wines and we would need a team of people dedicated to this to track and calculate the correct amount of duty for each product."

Mr Curtis said the average price of wine would "certainly go up for the UK consumer".

"It the same cost to set up a duty rate for 12 bottles of wine as it is if you're selling a million so inherently for small and medium merchants in the UK this is just going to become an administrative nightmare,

"The red tape is just huge so you can imagine some ranges will shrink and sadly some small and medium enterprises will probably go out of business. So for the consumer it is a case of higher cost, less choice and fewer merchants competing for their business."