Last March, during his budget day speech, the Chancellor finally came to his senses and announced the scrapping of the grossly unfair and much despised wine duty escalator. Implemented, ill-advisedly, in 2008, the money grabbing escalator lifted levels of duty on wine from £ 1.56 a bottle to £ 2.46 – a, frankly obscene, increase of 58% in a mere 6 years.
Clearly, George Osborne didn’t forfeit the huge extra tax revenues generated by the duty escalator on a whim and much credit for its consignment to the pile of bad political ideas rests with the ‘Call Time on Duty’ campaign. Now, with a notable victory under its belt, the same group is calling for Osborne to ‘Drop the Duty’ and all wine drinkers, without exception, should lend their support. It’s quick and easy to do and, later, I’ll explain how you can help but, first, let’s consider why you should.
Currently, if you buy an average priced bottle of wine in the UK, nearly 60% of the cost goes straight to the treasury. Despite consuming less wine than most other European nations, we, UK wine drinkers, actually pay more in wine duty than wine drinkers in France, Germany, Spain and Italy combined. In fact, quite incredibly, all of the named countries levy less than 4p on a bottle of wine. Maybe it’s just me, but knowing the stats, it’s hard not to chuckle a bit when I hear yet another news report telling us how well off we are compared to most of Europe!
Before, hopefully, enlisting your support for the ‘Drop the Duty’ campaign it’s worth backtracking a bit to explain how we got in this mess. Back in 2008, Alistair Darling, the then Chancellor, unveiled the duty escalator and, to summarise briefly, it increased duty by inflation plus 2%. That may seem relatively innocuous but with inflation during the period in question hovering at around 2%, it effectively meant double inflation price hikes every year. Added to that, the increases were cumulative (ie. always a percentage of the higher amount) and, on top of this, a further 20% VAT was payable on the duty itself.
So, what needs to be done? Well, ‘Drop the Duty’ is calling for a modest 2% cut in the rate of duty in next month’s budget and, as I stated earlier, all wine drinkers really need to lend support to the campaign. To do this, visit the ‘Drop the Duty’ website, where you’ll find lots of background information, and register your protest by sending a standard letter to your local MP. It’s really quick and easy, just enter your postcode and the website will do most of the rest. I did it and a few days later I received a hand written reply from Amber Valley MP, Patrick McLoughlin.
Anyway, having said my piece, it’s probably time to come down from my soapbox and talk a little about wine drinking as opposed to wine campaigning. It’s worth pointing out that the £ 2.46 duty charged on a bottle of wine remains static whatever the retail price of the wine is. So, after other costs such as labour in the winery, shipping and retailer margin have been factored in, it’s been estimated that the actual wine value of a bottle retailing for £ 5 is only 16p. However, using the same figures, the wine value within a £ 7 bottle of wine is £ 1.27 and it’s £ 2.93 in a £ 10 bottle. In other words, if you spend a little more, you get much better value for money.
Of course, you’d expect a wine merchant to say that and ultimately the choice is yours.