Reserve’s owner, Kate Goodman was interviewed by the Sunday Times last week about the vertiginous rise in the duty rates applicable to wine products over the last decade or two.
As it stands, on a £5 bottle of wine, the tax element between Duty and VAT is £3.06 or 60% of the cost of the bottle of wine. On a £10 bottle of wine, this is £3.90 or 39% of the total cost of a bottle of wine for the consumer.
Duty is a flat rate (currently £2.23 for wine between 5.5% abv and 15% abv) applicable to every single bottle of wine on sale in the UK, whatever the value of the wine. On that basis, it significantly impacts wines at the lower end of the price scale.
The average price of a bottle of wine sold in the UK in 2018 was £5.68. Small businesses aren’t able to absorb duty increases as much as larger retailers can. On that basis, the average customer is being priced out as wines exceed certain price barriers year on year.
This increase in prices also frustrates the attempts of the industry to dispel the stigmas associated with wine, which is still being perceived as a luxury or premium good.
Reserve Wines’ purpose as a business is to help wine drinkers at all levels enjoy their experience with wine, which, in our opinion, is nothing else but a drink, albeit a very interesting and pleasurable one.
We also believe that a reduction in duty levels will result in a win-win-win scenario for the consumer, the producer and the businesses in between facilitating this connection. The producer wins because he gets a fair price for his wines. The consumers win because they get good quality wine for their money, products that would otherwise not be available in the UK. And as a business we’re able to pay our staff a fair wage, grow, employ more people and bring more exciting products. We’re proud of this sustainable business model.
Kate says “We’re thankful that The Sunday Times has highlighted this issue, tax raised from wine is already a significant portion of public revenues, especially when compared to other countries in the world. SMEs are the life and blood of working Britain. Amending the duty rates to a fair level makes sense for the consumer, the SMEs of the wine industry and the treasury.”
The Sunday Times article can be found here(Subscription might be required)