Keir Starmer is being urged to dump Rishi Sunak’s ‘sneaky’ post-Brexit wine tax if he wins the keys to Downing Street this week.
Britain’s wine drinkers face a little-known ‘sauvignon surcharge’ from February, as part of changes brought in after the UK left the European Union.
As the prime minister uses the election campaign to repeatedly accuse Labour of planning secret tax rises if they get into power, experts and industry leaders today call for his booze levy to be dropped.
They warn it will lead to products disappearing from the shelves, raise the price of some reds by more than 40p a bottle and increase the number of tax bands for wine from one to 30.
Now in a letter to the country’s next leader, seen by the Independent, they say the next government “must act” to avoid “needless cost increases and unnecessary red tape”.
The call is backed by former Tory leader Iain Duncan Smith who told The Independent the new tax “is complex and could lead to misunderstandings”.
John Colley, the boss of Majestic Wine, which has more than 200 shops across the country, told The Independent the changes will “will increase prices and threaten the quality and choice of wines that UK consumers are currently able to enjoy.”
He said that the change “does not make any sense… everyone is a loser here – small business, consumers and the Treasury – and the policy needs to be stopped before it is too late.”
Labour MP Neil Coyle said: “If it fixes Sunak’s mess on this issue and raises more for the Treasury by making the change, then I hope any new Government will urgently review Sunak’s sneaky Sauvignon surcharge, this hit from the Tories on all wine drinkers.”
When Mr Sunak announced the changes in the 2021 spending review he declared them a Brexit benefit and promised they would lead to a system that was “simpler, fairer, and healthier”.
However, the plans have sparked a backlash from the UK wine industry.
The new regime taxes alcohol based on strength for the first time. Previously, levies were applied based on categories of wine, beer, spirits and ciders.
But when it comes to wine, unlike other types of booze, experts warn that alcohol levels vary based on a variety of things, including the weather, and risk becoming guesswork.
Because of the outcry, when the changes were brought in for other types of booze in August, ministers introduced a temporary flat tax for all wines between 11.5 per cent and 14.5 per cent alcohol by volume. This represents 85 per cent of the more than one billion bottles sold a year in the UK.
But that temporary fix is due to end at the start of February.
Hal Wilson, the co-founder of Cambridge Wine Merchants, said: “Imagine going to a petrol station and the price of fuel changes before, during and after you fill up your tank. Pretty bizarre but what the government’s planned changes to wine duty will be like for importers and consumers from February 2025.
“The new unworkable and unnecessary tax regime will mean ever-changing and unpredictable amounts of duty to be payable on the vast majority of wine. The cost of calculating these new amounts of tax, combined with the physical increases, will put wine prices up to consumers, which are already running at three times the rate of inflation. The UK, the world’s second largest import market for wine, will have gone from the most desirable place to do business with to one of the least, affecting everyone who likes a glass.”
Labour and the Conservatives have been approached for comment.
