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Wine Duty
05 March 2024
Lead MP
Will Quince
Colchester
Con
Responding Minister
Gareth Davies
Tags
EconomyTaxationBusiness & Trade
Word Count: 4068
Other Contributors: 6
At a Glance
Will Quince raised concerns about wine duty in Westminster Hall. A government minister responded.
Key Requests to Government:
I ask the Minister to commit to visiting Majestic Wine headquarters before the Easter recess to understand the full implications for businesses. I hope the Government can make a decision soon to continue or permanently extend the easement mechanism that protects wine duty rates.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The UK's wine and spirits industry supports over 390,000 jobs and contributes £69 billion to the economy. However, new alcohol excise rules introduced last year have imposed significant challenges on businesses such as Majestic Wine, particularly due to duty increases and a change in how wine duty is calculated. These changes reinforce existing market distortions by taxing wine more heavily than other alcoholic drinks and create an administrative burden for retailers dealing with over 100,000 different wines on the UK market. The temporary easement mechanism set to expire in February 2025 will affect major retailers and thousands of independent merchants, imposing millions of pounds in additional costs.
Flick Drummond
Con
Mid Worcestershire
Flick Drummond raises concerns about the impact of the current regime on UK wine growers, an important and fast-growing agricultural sector. She points out that this includes job growth in the industry.
Jim Shannon
DUP
Strangford
Jim Shannon expresses concern about the potential impact of proposed changes on job creation and retention in his constituency, highlighting James Nicholson Wine as an example. He agrees with the hon. Gentleman's argument regarding increased red tape.
Julian Sturdy
Con
York Outer
Julian Sturdy supports the debate on behalf of Liquid Indulgence, a small wine supplier in York. He states that the proposed changes could have a significant negative impact on such businesses and their ability to maintain operations. Highlights the administrative burden imposed by ending the easement mechanism, noting the impact on small wine suppliers and retailers.
Wolverhampton South East
Laurence Robertson speaks on behalf of Direct Wines based in his constituency, arguing against removing the easement at a time when the hospitality sector is still recovering from the pandemic. He warns that additional cost pressures could lead to more closures.
Priti Patel
Con
Witham
Priti Patel agrees with her colleague's assessment, noting that thousands of wine businesses across the UK are struggling. She argues that the current regime has failed to simplify administration and is instead imposing unnecessary burdens on producers and merchants. Agrees that the new duty regime imposes unnecessary costs and administrative burdens on wine businesses.
Stevenage
The Wine Society, headquartered in Stevenage, is facing significant costs to upgrade systems and re-evaluate wine ranges due to the current regime. Stephen McPartland highlights this as an example of unintended consequences and suggests that making the easement permanent could alleviate these pressures. The new alcohol excise system is not simpler and has significant cost implications for businesses, reinforcing existing market distortions.
Government Response
Gareth Davies
Government Response
I congratulate my hon. Friend the Member for Colchester on securing the debate and commend the alcohol duty reform package, which introduces a new simplified system based on taxing alcohol by strength to support businesses and meet public health objectives. The reforms include removing the sparkling wine premium since August 2023, allowing domestic growers of English sparkling wine to attract less duty than under the previous system. A wine easement was introduced for 18 months until February 2025 to provide time for industry adaptation. Although changes have raised concerns, the minister commits to monitoring reforms and conducting an impact assessment three years post-implementation. The Government also announced tax cuts worth £4.3 billion over five years to support the hospitality industry, including a freeze on alcohol duty, business rate relief up to £110,000 per business for 2024-25, and holding the small business multiplier steady for the fourth consecutive year. Compared with 2015, wine duty is now some 12% lower in real terms.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.