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This blogpost was originally posted to reflect upon comprehensive changes to the UK wine duty system made in 2023 and has been updated to reflect changes in UK duty rates applicable from 1st February 2025. Both 2023 and 2025 saw changes to the UK’s alcohol duty rates, all rises of course. It has been a long time since rates went down. Despite much lobbying by the drinks industry, despite a change in government and despite both governments’ stated desire to control inflation, higher rates of duty were applied to most wines in both of those years. 2023 also saw the biggest changes to the way in which duty was to be applied to wine, changes which no-one in the industry considered fair or reasonable – read on to find out more.
From 1st August 2023 it is estimated that 90% of still wine would see duty rise by at least 9% from its then level of duty – £2.23 per bottle. Duty on a fairly average 13% ABV bottle of wine increased by 20% to £2.67 and for still wine with 15% ABV the rise in duty was a whopping 44% to £3.21 per bottle (these rates exclude VAT which applies to the duty charged as well as to the wine itself).
Fortified wines like port at 20% ABV then attracted a duty increase of £1.30 per bottle to £4.28 and the highest increase of £1.73 was applied to a fortified wine with 22% ABV. This compares with extra duty of 82p on a bottle of 37.5% ABV vodka.
See table below for some examples of increases – and decreases in duty from 1st August 2023. Further increases introduced in 2025 are also listed below and discussed further below.
| Duty per bottle pre 1st Aug 2023 | Duty per bottle 1st Aug 2023 – 31st Jan 2025 | Duty per bottle from 1st Feb 2025 | Percentage increase since 31st July 2023 | |
| Still wine 11% ABV | £2.23 | £2.35 | £2.43 | 9.0% |
| Still wine 11.5% ABV | £2.23 | £2.67 | £2.54 | 13.9% |
| Still wine 13% ABV | £2.23 | £2.67 | £2.88 | 29.1% |
| Still wine 14.5% ABV | £2.23 | £2.67 | £3.21 | 43.9% |
| Still wine 15.1% ABV | £2.97 | £3.22 | £3.34 | 12.5% |
| Sparkling wine 11% ABV | £2.86 | £2.67 | £2.43 | -15.0% |
| Sparkling wine 11.5% ABV | £2.86 | £2.67 | £2.54 | -11.2% |
| Sparkling wine 13% ABV | £2.86 | £2.67 | £2.88 | 0.7% |
| Sparkling wine 14.5% ABV | £2.86 | £2.67 | £3.21 | 12.2% |
| Sherry 16% ABV | £2.98 | £3.42 | £3.54 | 18.8% |
| Port 20% ABV | £2.98 | £4.28 | £4.43 | 48.7% |
N.B. Transition rates applied to all wines between 11.5% and 14.5% until 1st February 2023. Figures above do not include VAT which applies to duty
A flat rate of duty, £2.67, applied to all still and sparkling wines with ABV between 11.5% and 14.5%. Effectively all wines in that range were treated as if they had an ABV of 12.5%. This meant an increased rate for still wines and a slight decrease in duty for sparkling wines. The transition rate simply delayed the pain of having to apply different duty rates according to the alcoholic strength of each wine.
I have written elsewhere about the unfairness of taxation on wine compared to other alcoholic beverages so will not reiterate those thoughts in this blogpost apart from to write that when the government has frozen duty rates on alcohol, there is evidence that revenue from wine duty in the UK grows – and, to be fair, duty rates have been frozen since the Autumn Budget of 2020.
Conversely wine duty receipts usually fall after an increase in the rate of duty on wine and so it seems strange that most Chancellors keep making the same mistake, increasing duty so much and so frequently – and in particular, changing the system in this way.
One of the stated aims of the government’s Alcohol Duty Reforms is to simplify the current system – the broad idea being to tax alcohol depending upon its alcoholic strength which does not seem unreasonable. But, after a number of hours spent calculating the new rates and comparing them to current rates, the system does not feel simpler at all. There was the added complication of the Transition Rates which applied until 31st January 2025, after which most rates increased and only a couple decreased.
All in all the detail of the system is cumbersome for wine businesses to manage – and costly. The Wines & Spirit Trade Association estimated £250m extra costs to the industry to handle the changes. Alcohol levels in wine vary according to the vintage – warmer weather usually means more of the sugar in grapes converts to alcohol – and so the duty rate is expected to change for most wines every year. Every wine retailer therefore needs to be prepared to adjust prices for every wine that it stocks every year.
The increases in duty generally will be hard for customers to stomach especially in the current economic climate, never mind the extra costs of administration that are no doubt going to have an impact on the general cost of wine for the consumer.
Prior to the changes the system for duty charges could be described fairly succinctly:
– £2.23 per bottle for most still wines, certainly all those between 5.6% ABV and 15%
– £2.86 per bottle for most sparkling wines, certainly all those between 8.5% and 15%
– £2.98 per bottle for all wines between 15.1% and 22% ABV which includes most sherries and port wines
Of course there were exceptions to these three bands but they corresponded to the vast majority of wines sold in the UK. Under the new regime with alcohol taxed according to its strength and increasing for every 0.1% ABV, there are now effectively many more bands.
The seemingly good news is that there have been decreases in some rates of duty. From 1st August 2023 the following saw a decrease in the rate of duty payable:
– any wine between 1.3% ABV and 3.6% ABV
– any wine between 4.10% and 5% ABV
-any still wine between 5.6% and 10% ABV
– any sparkling wine between 5.6% and 14.5% ABV
Not exactly easy to follow. Apart from a few quirks in the system (wines between 5.1 and 5.5% ABV seeing higher rates for example), you can see the logic. The government is trying to encourage better health by lowering rates on lower alcohol wines.
However, whether intentional or not, they are penalising those who don’t favour sparkling wines and off-dry white wines – as these tend to be lower in alcohol than most other wines. The grapes for sparkling wines tend to be picked before they are fully ripened partly to retain good levels of mouth-watering acidity. Less ripe grapes mean less sugar is available to develop into alcohol during fermentation. For off-dry wines, fermentation is stopped early by removing the yeast so that some sweetness is retained in the wine.
Although it might initially have appeared that several bands of wine would see a decrease in duty, the vast majority of wine sold in the UK is between 11.5% and 15% ABV and so most of the wine we are used to purchasing saw an increase. This included:
– any wine between 3.8% and 4% ABV
– any wine between 5.1% and 5.5% ABV
– any still wine between 10.5% and 14.5%
– any wine with 15% or higher ABV
As has been alluded to above, grapes for still wines generally tend to be picked at a higher level of ripeness than grapes for sparkling wines and therefore most still wines will be over 10.5% and will therefore attract a higher rate of duty. Grapes for white wines tend to be lower in alcohol than black grapes and tend to be picked at a lower level of ripeness; grapes for red wines tend to be left on the vine until fully ripened and so are likely to lead to higher alcohol wines, generally 12.5% – 15% ABV. Wines like Amarone where sugars are intensified by drying the grapes frequently have 15%+ ABV.
After 1st February 2025, under Stage 2 of the system changes, the Transition Rates will no longer applied and duty on all wines is now calculated according to their specific alcoholic content. All wines from 12.2% ABV, still and sparkling, saw an increase from the transition rates and if you look in the table above (updated after the November 2024 budget), only duty on sparkling wines up to 12.5% ABV is lower than it was before this whole system change was announced. Rates are unlikely to come down any time soon as the current Government has maintained the aim of the last Government – to increase duty in line with inflation each year.
The further rate increases in 2025 were in line with Retail Price Index inflation which might normally seem fair but when you look at the increase since 2023, some rates of increase are not in line with inflation. For example the duty on a bottle of still wine with 14.5% ABV has increased by almost 44% since early 2023. Only on sparkling wines at 11% and 11.5% ABV has duty decreased.
We could all change our drinking habits and stick to sparkling and off-dry wines to keep costs down but we would miss out on so many fabulous wines. We could stick to wine from cool climate areas where alcohol tends to be lower but with global warming ABVs could rise there too.
If winemakers see more demand for lower alcohol in wine – and there is some evidence that we are already moving away from the big blockbusters – there are ways to reduce alcohol in wine as I wrote about in a blogpost titled Reducing Alcohol in Wine. Manually reducing alcohol is not as easy as it sounds and it is more likely to happen with wines at the lower end of the market where there is generally more intervention in the wine-making process. Most discerning wine drinkers prefer to see more natural wines with minimum intervention.
There is a chance that the choice of wine available in the UK decreases. For example wine from hotter climate areas which naturally produce higher alcohol wines may be withheld from the UK market if winemakers feel their wines are being penalised by the system.
And there may be fewer wine retailers around. It is estimated that many smaller wine businesses similar to Wines With Attitude may find these duty changes – along with the added increases in costs of importation and the rising cost of wine itself – a step too far and let’s not forget the hospitality sector which will also be impacted by the changes just as it is finding its feet again after the pandemic.
The industry body, the Wine & Spirit Trade Association or WSTA, actively campaigns to scrap the new system and abolish increases in duty which have increased wine prices and quite simply fuelled inflation. They have calculated that the 2023 increase was the biggest single duty increase since 1975. But the government is simply “not for turning”, perhaps hoping that people will focus on the decreases in duty rather than the increases – as has been mentioned, some sparkling wine duty rates have come down in price.
It is likely that the real impact of the price changes will not be seen for a few months, except perhaps some immediate fanfare around a decrease in bubbly prices. Some wine businesses like Wines With Attitude tried to mitigate the duty increases – at least those 2023 increases – firstly by paying upfront the duty and VAT on wines that have been bought under bond (i.e. where duty and VAT are usually only paid when the wine is sold). If however they have bought sparkling wines duty paid, they may not have been able to decrease their prices to take account of the decrease in duty on those. If you hold any wines under bond, have a chat with your bonded warehouse about doing the same especially for still wines between 10.5% and 14.5% ABV and for any wines with 15% ABV or higher. Duty rates are unlikely to go any lower.
In addition some retailers purchased stock upfront and paid duty ahead of the rises but this of course may mean the cost of storing the wine for longer outweighs the advantage in paying duty at the current rate. Just one of the reasons why most wine prices continue to rise unfortunately.
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