Wednesday, 24 March 2010

The Budget - yet another hike in the tax on wine

Well, I suppose it was bound to happen, although (if you believed some predictions badied about beforehand) it might have been worse. Nevertheless, today's rise in excise duty announced by our dear Chancellor, Mr Darling, means that the duty on a bottle of table wine is now perilously close to £2 (including the VAT element). I guess I have a vested interest, so I feel somewhat duty-bound (if you'll excuse the pun) to have a whinge about it, but these constant hikes in duty really do rile me. And I know for a fact that they rile most responsible wine drinkers.

I'm not sure that the small, though increasing, number of neo-prohibitionists in the corridors of power are that influential - yet. But their cause certainly gives the Government a fancy excuse for indiscriminately targeting all drinkers in their "fight" against the binge drinking culture. Whether or not they really are that bothered about getting to the root of that little problem is highly debatable (we all know it goes much deeper than the mere cost of alcohol). Somehow, though, I doubt it. Like petrol and cigarettes, the taxes on alcohol provide untold billions of Pounds in revenue and - not just in the current economic climate, but always - provides the Treasury with an easy win. I doubt that this latest increase will have the slightest effect on alcohol consumption in the UK. The streets of our towns and cities will still be thronging with binge drinkers, falling out of the pubs and clubs at the weekends (actually, make that most nights) but the Government won't mind, because it means even more money in the Treasury's coffers. And the fact that - for the majority of people who drink moderately and responsibly - it will make buying a bottle of wine to enjoy quietly at home with their evening meal ever more expensive means nothing to them because, when it comes to raising taxes, we are all fair game.

Anyway, rant over. Tomorrow, I'll get back to talking about some wines I have (very responsibly) enjoyed recently!


Richard said...

Leon, it's not a 'hike' which means a sharp increase, it's a modest rise. We need the money so should wine drinkers be exempt? Your customers (including me) can afford it, I suspect

And I don't think that the latest rise is intended to do anything about binge drinking so it is unfair to criticise Darling on that point.

Graham said...

You could argue that on a £5 bottle this is roughly an inflation indexation increase in duty. On £10 plus it's well below that.

Leon Stolarski said...

Blimey - does a couple of dissenting replies constitute a mini hornet's nest?! ;-)

Richard, Graham - when I started importing wine 6 years ago (is it really that long?!) excise duty on a 75 cl bottle of wine was around £1.12. It is now £1.69. I'm not great at maths, but that is an increase of 50% in 6 years. Given that inflation has been pretty low during the same period, I think that represents a hike.

Now if we had seen an annual rise of (say) 4% on duty, which is probably somewhere in line with the true rate of inflation (as opposed to highly-manipulated Government figures) then that duty would currently be £1.42. Which would still be too much, in my opinion, but it would be much more equitable and easier to swallow.

The fact is, we in the UK have for many years had one of the highest rates of excise duty in Europe. And for someone like me who sees drinking wine (always in moderation, I hasten to add) as part of a healthy diet and lifestyle, it just seems plain wrong. I could cite countless different analogies, but take burgers, chicken nuggets and chips (French fries), for example. If you eat too many (as so many people do, these days) you will become extremely fat and/or your arteries will become clogged and you will die. So why not levy a tax - or even VAT - on all the foodstuffs that are (if not consumed in moderation) harmful?

Don't get me wrong, I'm not asking for that to happen (though who knows - it probably will, one day) but you can see what I mean. Taxing enjoyable things such as alcohol is such an easy option. And whilst the Government's main - and oft-stated - reason for doing so is to curb binge drinking, it seems disingenuous in the extreme. As I said, the neo-prohibitionists haven't yet taken over the asylum (there are too many drinkers in Westminster) their cause gives the Government the perfect excuse to keep increasing the taxes on wine/beer/spirits to their hearts' content, simply as a way of gathering more revenue.

I could ramble on about the subject until the cows come home, but my opinion isn't going to change things. And frankly, neither is my vote - should I exercise my right to use it. I'll be honest and say I've voted Labour all my life. If any of the alternatives seemed at all attractive to me, I might even switch sides. But they don't, so I have two alternatives - do as I have always done, or (more likely) vote for the "none of the above" party(!)

One more thought about who and who can't afford it; my customers that tend to buy the medium to upper priced wines probably can afford it. But what about the wines at the lower end, which (due to the perilous state of the exchange rate and the ever increasing duty rate) get more and more expensive. Frankly, they are no longer priced at the "lower" end.

Anyway, for an alternative view on the latest duty rises, see Jancis Robinson's article here....