WSTA: ‘the Government has failed the wine industry’

Wine businesses have proved remarkably resilient over another year of challenges, WSTA chief executive Miles Beale has said, however this is in spite the government, who he said had failed the UK wine industry, with “opportunistic” and inept duty rises. 

“Wine businesses like those here today have been able to weather the events of the last few years not because of what the Government has done to help them but in spite of the obstacles the Government has put in their path. And it is definitively NOT meant to be like this,” Beale told a London Wine Fair Industry briefing this morning. “In short this Government has failed the UK wine industry”.

Duty increase

He criticised the “ill-thought out policies”, notably the 10.1% increase across all alcohol duty that is due to take effect from 1 August this year, saying that “at a time of out-of-control inflation and a cost-of-living crisis for UK consumers, the Government has taken the decision to add to those inflationary pressures and to make goods even more expensive for hard-pressed consumers”.

“I simply cannot see how this is in any way consistent with the Prime Minister’s number one – and otherwise laudable – priority to cut inflation by the end of the year,” he said.

He said this was inconsistent, arguing that double-digit duty increase would drive rather than reduce inflation and also unnecessary.

“There was – and remains – no pressing need to increase duty rates,” he said, calling it “pure opportunism” and “an active and inept choice to increase pain and misery on our industry and its consumers”.

He also slated the “largest increase in duty in percentage terms since 1975”, which will see a 20% rise on still wine and the 40% duty on fortified wines.

He argued that “far from levelling the competitive playing field, the government has reinforced the current distortions” of the existing system. “How is it economically rational for wine and spirits to pay 50% more duty for the same amount of alcohol than beer; and more than three times the rate levied on cider under the new regime?”

He said the go Government had “steadfastly refused to grasp the complexity of the wine sector or acknowledge that its new tax model is not fit for purpose”,

“It is not fairer, not easier to administer and not economically rational,” he said. “The new system will be deliberately unfair, more so for wine than any other product; significantly more bureaucratic – especially for SMEs; impractical; and will design in new and costly red tape. ”

Beale also attacked the government’s stance on environmental sustainability, calling on radical reform of the the UK’s system of Packaging Recycling Notes (PRN’s), the  system that demonstrates that a tonne of packaging waste has been recovered and reprocessed or exported for reprocessing. Currently the price varies from year to year – by as much as ten times –  meaning businesses cannot plan in advance. He argued that the new waste regime that will be introduced, the Extended Producer Responsibility (EPR) is likely to have the same problem.

He welcomed the delay to the introduction of Scotland’s Deposit Return Scheme until March, but cautioned that this was not a long enough delay “given the huge amount of work that’s still required” and that some of the planned easements and exemptions would be very complicated to operate in practise.  He argued that the Scottish scheme was being “introduced and driven [by] political dogma rather than environmental outcome”, in a similar vein to the minimum unit pricing (MUP) policy and proposals to curb alcohol sponsorship and marketing in Scotland.

” At the same time as politicians in government say they want to halt inflation, see hospitality recover, create jobs and generate economic growth, they are not so much biting the hand that feeds them – but mauling the whole arm,” he said.

He did, however, single out Defra and the Department for Business and Trade for listening to industry. This had led to some gains he noted, such as the scrapping of wine import certificates. It proved, he said that it was possible for government and the trade to work hand in hand, even if this was sadly the exception rather than the norm.

“Across multiple policy areas – and different parts of the UK – we repeatedly see unlistening government trying to roll out politics-led, evidence-free policy to produce impractical, untenable or downright unworkable interventions that ramp up prices for punters in a cost-of-living crisis and increase costs for the SME-rich UK wine industry,” he said. finishing with “a plea” to the Governments in  Westminster and Edinburgh to: “Stop fighting us, stop fighting amongst yourselves, stop fighting each other. Look up, look ahead – and trust business to help deliver a shared agenda.”