‘Sneaky Sauvignon surcharge’: Next prime minister urged to dump Sunak’s post-Brexit wine tax

Sir Keir Starmer is being urged to abandon Rishi Sunak’s “sneaky” post-Brexit wine tax if he wins the keys to Downing Street this week.

Britain’s wine drinkers will have to pay a little-known “sauvignon surcharge” from February next year, 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 have today called for his booze levy to be dropped.

They warn that it will lead to products disappearing from the shelves, raise the price of some red wines 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”.

Experts warn some wines will become more expensive – and some could disappear from the shelves entirely (Getty/iStock)
Experts warn some wines will become more expensive – and some could disappear from the shelves entirely (Getty/iStock)

The call is backed by former Tory leader Sir Iain Duncan Smith, who told The Independent that the new tax “is complex and could lead to misunderstandings”.

The letter has been signed by 58 names including the Wine and Spirit Trade Association, Adam Guy, the managing director of Laurent-Perrier (UK) Limited and James Davy, the chairman of Davy’s Wine Merchants.

John Colley, the boss of Majestic Wine, which has more than 200 shops across the country, told The Independent that the changes 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”, adding: “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”.

When he first unveiled the changes Rishi Sunak declared them a Brexit benefit (PA Wire)
When he first unveiled the changes Rishi Sunak declared them a Brexit benefit (PA Wire)

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, experts warn that, unlike in other drinks, alcohol levels vary due to a variety of factors, including the weather, and risk becoming a matter of guesswork.

Because of the outcry, when the changes were brought in for other types of booze in August last year, 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 each 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 for consumers, [when they] 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.