Wine Duty

Jim Shannon Excerpts

Tuesday 5th March 2024 Westminster Hall

[Will Quince]

My right hon. Friend and constituency neighbour is absolutely right to raise that issue, and she has long championed cutting the red tape and bureaucracy that British businesses face. As my right hon. Friend the Member for Stevenage (Stephen McPartland) said, this unintended consequence means that business faces not just extra cost but the significant administrative burden that comes with cost and time. My right hon. Friend the Member for Witham (Priti Patel) is right to point out that the new system is not simpler or fairer and that it has a huge cost implication.

[Jim Shannon (Strangford) (DUP)]

First, I commend the hon. Gentleman for securing this debate. James Nicholson Wine in Crossgar, which is in my constituency, is one of those excellent wine businesses that draws lots of people, not just because of the quality and wide variety of its wines but because it has also become a bit of a tourist attraction. It does lots of things. When it comes to the retention of jobs, does the hon. Gentleman share my concern that the Government’s proposed changes will undoubtedly—though I hope not—have an impact on job creation and job retention?

[Will Quince]

The hon. Gentleman is right to intervene on that point, because job creation and retention, including in his constituency, is important, as is our flourishing tourism sector. The growth in wine production across our country is something that we should celebrate; we should be proud of that and support it.

This debate is timely because we have some time on our hands. Obviously, the sooner we give notice to industry that the easement can continue, the lower the cost and administrative burden borne by industry. We have until 1 February 2025 to address this issue. I will have an ask for the Minister in a few moments, which I hope the hon. Gentleman will agree with.

I will just touch on one other element first, which is why wine is different. The easement recognises that wine is different from other categories of alcoholic drink. Wine cannot be made to a predetermined strength; the alcoholic strength of wine is determined by climate. I know that I do not need to teach anyone in this Chamber to suck eggs, but wine from warmer climates tends to be higher in alcohol than wine from cooler climates. Wine is not like beer or cider. And wine is subject to strict production rules, so in that respect it is also unlike beer and cider. As a consequence, there is very little that wine makers can do to lower the alcohol content.

It is estimated that there are over 100,000 different wines on the UK market. By comparison, there are less than 1,000 different ciders. Different vintages of wine can vary in strength, as is the case with some wines from the same year. Of course, that is one of the great pleasures of wine; wines from around the world are unique, while different vintages from the same vineyard can differ in strength and taste.

Taxing alcohol by strength, with lower rates for lower-strength products, might seem simpler on paper, but it takes absolutely no account of how different alcoholic products are consumed, including in what quantities and whether the product is diluted. This new system is much more complicated to administer for wine businesses and it penalises wine from warmer climates.

The differences between wine, spirits, beer and cider will remain if the easement ends. In practice, if the easement is abolished as planned, there will be 30 different payable amounts for wine in the 11.5% to 14.5% ABV range.