Independent merchants are being forced to justify big price increases on their wines to customers as the August duty hike comes into effect.
Retailers are finding that consumers, and even some trade customers, have either forgotten that the increase was coming, or else were unaware of it in the first place.
Although the headline duty increase is 44p, many wines will see prices jump far higher than that as suppliers also apply inflationary increases.
Hannah Wilkins of Vineyards in Sherborne, Dorset, says: “I was looking at prices and I saw a wine that I’m now buying for the same price that I was selling it for five years ago.
“I look back at what the duty was in 1998, as opposed to what it is now, and I’m absolutely appalled by it.
“The winemakers aren’t making any more money. That’s all I care about, because we’ve got to look after the people that are making the stuff.”
Dean Pritchard of Gwin Llyn Wines in Gwynedd says wine merchants “have just become tax collectors for the government”.
He adds: “It’s going to be hard enough for retailers – we’re just passing on the cost. But I feel for the restaurateurs with the utility bills and everything else … this is the last thing they need.
“Honestly, I don’t think anyone who brought this out has got any clue about what they’re doing. Wine is the most popular drink, and brings in most tax. The government would be raising more money in the next 12 months if they had left duty on wine alone.”
Some suppliers have been issuing graphics that help merchants explain to their customers how different categories have been affected by the duty hike. Still wine has typically gone up by 44p a bottle, sherry by 97p and port by £1.30. Sparkling wine at 11% abv is down 51p and at 12% abv by 19p.
Wilkins argues that the reductions on sparkling wine are not necessarily as welcome as the government has portrayed them to be.
“It’s an absolute smokescreen,” she says. “Actually, it’s more headache work, because you have to go back to the producer to find out what the percentage is going to be on their next batch, then work out whether duty’s going to be added or whether we’re having 19p taken off of it. Equally, if the producer hasn’t increased their prices in the past year, then they might want to add 25p on the bottle too for their costs.
“I’d hate to be a producer right now. Long term I think it’s going to make the wine trade in the UK less appealing for producers. If I was making sherry or port I wouldn’t be interested in the UK market.”
Pritchard says: “It’s quite amazing, because we’re mentioning it to customers and they had no idea that duty has been increased and about the repercussions that’s going to have.
“As we get deliveries from next month with the new price increase, we will just have to pass it on.
“We’ve only got a few trade customers and I was letting them know months ago, but they’ve not been stocking up, to be honest. As we’ve had the new prices from our importers, I’m readjusting our prices. It’s not exactly what the hospitality industry needs in August.”
