Taxing times for the British wine trade

Today's duty freeze is welcome - but wine merchants and drinkers have already taken a beating from this government. Plus: what I've been drinking this week

Liam Plowman in his shop, Wild and Lees, Herne Hill, south London

WILD and Lees has built a loyal following since it opened in 2016 to offer wines, beers and spirits to the drinkers of Herne Hill, south London. Local, knowledgeable but unintimidating are the store’s selling points: indeed as people rediscovered their neighbourhood during the pandemic, says owner Liam Plowman, business went up. The store has held on to that, he says: and yet independent wine stores like his face tough times with the pressures of high inflation, online sales, increased rent and rates – and the biggest alcohol tax increases in decades.

Plowman and his fellow merchants breathed a sigh of relief today when Chancellor Jeremy Hunt chose to freeze alcohol duty in his Autumn Statement today. The threat of a further hike in line with inflation had been hanging over the industry.

But it had already taken a real beating in Hunt’s March Budget, which put up the duty on a bottle with more than 12.5 per cent alcohol by 44p. That alone was the largest single increase in alcohol taxes in nearly 50 years. Says Plowman, “we have to pass it on to be a viable business.”

Worse, part of the August increase was thanks to a new tax regime of baroque complexity, charging according to the level of alcohol: there are now 105 possible tax payments on a single bottle. These changes were dreamt up by then-Chancellor Rishi Sunak in 2021. They reflect a blinkered mentality, with the claim that it will help “small craft spirit and wine producers innovate lower-strength products”: only a Coca-Cola-obsessed teetotaller like the Prime Minister could imagine higher taxes having any such effect on imported French or Spanish wine.

Those changes have combined with the highest food and drink prices inflation in decades. The whole wine supply chain has been subject to huge inflationary pressures.

All of this, of course, comes on top of the self-destructive inferno of Brexit, with its impacts both on both customs paperwork and in weakening Sterling against the Euro. Importers now complain constantly of shipments being held up in customs for days or weeks. Last week I was at a big Spanish tasting where several samples had failed to arrive for this reason.

This matters not just because of the increases to the cost of living for millions of British drinkers. Tax hikes also hit the British wine and spirits trade, which according to the Wine and Spirit Trade Association supports some 360,000 UK jobs and contributes £50 billion a year in economic activity. The WSTA ran an impassioned and, it turns out, successful campaign against the further duty increase mooted for today.

Liam Plowman is the face of the trade in my neighbourhood, one of more than 1,000 independent wine shops in the UK, according to a survey earlier this month by Wine Merchant magazine. Those numbers have held steady or increased in recent years, testimony to the kind of trusted local advice they can offer drinkers even in a world of online shopping. But their economic position remains precarious: “we’re working on thinner and thinner margins,” says Plowman.

The past couple of weeks have seen mourning in the wine trade for the disappearance of the last Oddbins store – though in truth even when it last went bust in 2019, it was long past its glory days. Still, Oddbins’ slow death is a reminder that even the best-conceived wine shops have to fight to survive. Today’s duty freeze gives them the narrowest of breathing spaces. But the whole trade has an ongoing battle on its hands.

What I’ve been drinking this week

Bodegas Bentomiz Pixel Blanco 2019, Malaga – my wife’s cousin opened this unusual blend of Pedro Ximénez and Moscatel de Alexandria when we were round last week. It’s is dry, mineral and almost saline, yet citrussy and floral: almost sherry-like, hard to pin down, intriguing (Worsley Fine Wines, Vino Gusto, from £13.95 for the 2021.)

Gerovassiliou white 2020, Epanomi – Evangelos Gerovassiliou single-handedly rescued Malagousia from near-extinction in the 1980s; it’s now planted quite widely in Greece but his remain some of the most delicious examples of this exuberant white grape. Here its tropical fruit is tempered with the addition of the more austere Assyrtiko. Bright, herbal, lemony: just a gorgeous, sophisticated Greek white  (Stroud Wine Company, £18.95 – other vintages elsewhere.)

Mancuso Garnacha 2019, Cariñena – made from Garnacha produced by old bush vines grown at over 600 metres, this is rich with pure, sweet fruit but well balanced with acidity (Wine Society, £13.95.)

• Transparency disclosure: I paid for all the wines mentioned this week, except the one served by family.