Falling alcohol duty revenues could lead to a policy rethink by the Treasury, Suntory Global Spirits UK & Ireland MD Nick Temperley has suggested.
Speaking at The Wine & Spirit Trade Association’s Industry Summit in London on Wednesday (10 June) Temperley said the Treasury was “quite dominant” in decision making under the current Labour government.
“Revenue into the Treasury feels like it’s driving policy,” he said. “That’s my read and what I see in our industry.”
With excise duty receipts from booze declining by £182m in the financial year ended 6 April 2026, this could lead to “some thinking in Whitehall that maybe it had gone too far”, with recent tax hikes, Temperley said.
“Treasury revenues are way lower than forecast and it is really hurting the industry,” he said. “But I am kind of hoping that some of the traffic lights they are looking at are flickering, and showing that things are not going the way they expected.
“To me, with the Treasury feeling like the dominant voice, it might understand that supporting and removing bureaucracy from the alcohol industry, whether it’s from producers or retailers, actually drives growth in our economy, which is what we need in this country right now.”
A freeze or cut to alcohol duty would provide much-needed relief to the sector, with suppliers having swallowed three rises since August 2023, when a major change in how booze rates are calculated was introduced alongside a 10.1% hike.
The government announced a review into the 2023 duty changes in April and is seeking feedback from the industry on the move to a new structure in which booze products are taxed according to their alcoholic strength.
The reforms have led to an explosion in the number of products below 3.5% abv, but have been criticised by wine suppliers, which claim the changes unduly punish products from certain regions and climates.
Duty discriminaton
Speaking to WSTA Industry Summit attendees on Wednesday, Dr Ignacio Sánchez Recarte, secretary general of European wine industry trade body The Comité Européen des Entreprises Vins (CEEV) hit out at the changes.
“The problem is not the product but how you drink it,” he said. “If you drink three litres of cider you will have the same impact as half a bottle of wine or three gin & tonics.
“The second part is discrimination. We cannot produce wine according to a recipe. You take the grapes that the vine gives you thanks to the sun and you get what you get. So by having excise duty applied by degrees of alcohol you will discriminate against wines from Sicily or Jerez from those from the Rhône Valley.
“This may push producers to try to reduce alcohol using processes that do not result in the best wine possible.”
The WSTA, meanwhile, has joined calls for a return to the transition duty rates that were applied for wine between August 2023 and February 2025.
The rates were designed to give suppliers time to adjust to the new duty system and treated all wines between 11%-14.5% abv as though they were 12% abv for tax purposes.
“There was a chink of common sense for an 18-month period where we had an amnesty for wines between 11%-14.5% abv,” said WSTA board member and C&C Group procurement director Gillian Murray. “If we could try and revert back to that it would definitely help.”
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