Wine drinkers looking forward to the end of a dry January can also expect a sharp rise in the cost of a bottle as Labor moves forward with its alcohol mandate.
Prices of Malbec, Shiraz and Cabernet Sauvignon will increase after February 1 due to a new scheme that taxes alcohol based on its strength.
The duty was in force on August 1, 2023, but the Conservative government introduced a temporary reprieve for wines with a strength (ABV) between 11.5 percent and 14.5 percent, taxed at a flat rate of 12.5 percent.
However, this weekend marks the end date for this temporary easement, meaning wines with higher alcohol content – usually from hot climates – will attract more tax.
Sellers have urged the government to reconsider the industry's 'death by a thousand cuts' claim, although the Treasury insists the changes represent a 'modernised' and 'simplified' system.
The vast majority of bottles for sale are subject to 30 different tax bands with one band per 0.1 percentage point difference in alcohol content.
The alcohol obligation will simultaneously increase by 3.6 percent on February 1 and waste packaging recycling charges will come into effect in April at 12p a bottle.
The Wine Society says the industry has become “a target for lawmakers,” The Times reports.
Prices of Malbec, Shiraz and Cabernet Sauvignon will increase 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 higher alcohol content – usually from hot climates – will attract more tax (file image)
Hal Wilson, co-founder of Cambridge Wine Merchants, also asked whether the government was “unknowingly penalizing 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 percent – would rise by £1 to £11.99 and £14.99 respectively.
Miles Beale, head of the Wine and Spirit Trade Association, said the tax increases would worsen the fall in alcohol sales, highlighting figures from HM Revenue & Customs that showed alcohol tax receipts fell by £209 million last year.
Meanwhile, some health campaigners have welcomed the change, saying excessive drinking can lead to a higher risk of brain damage, liver disease, dementia and cancers.
A spokesperson for HM Treasury said: 'Alcohol reforms have modernized and simplified the service system, prioritizing public health and encouraging consumption of lower strength products.'
