Paul Schaafsma, general manager for Accolade Wines (UK, Ireland and AMESCA), revealed the findings at a launch event for this year’s report, highlighting that since 2002, 80% of the rise in wine pricing has been from alcohol duty increases, and that today, tax accounts for 60% of the price of a bottle of wine.
Schaafsma recognised the beer industry for its campaign to end the duty escalator but said the tax regime did not only affect brewing but was having an impact across the drinks manufacturing and retailing landscape – and that the whole drinks trade needed to align.
Schaafsma said: “As an industry we must show our government that we are one voice. “Relentless tax increases are crippling an industry that provides thousands of jobs and contributes significantly to the national economy and local communities.”
The report outlined that the wine industry is facing further challenges with rising costs, poor harvests and domestic demand in wine producing markets, which will add to pricing pressures in the UK, with Italy, California and New Zealand potentially seeing the biggest impact from rising prices. Raising grain and oil prices will also add further pressure to supply chain costs.
In the off-trade, the average price of a bottle of wine is now £4.95, of which the wine itself accounts for just £1.05. The assumed retailer margin is a further £0.92 while tax, including VAT, duty and Common Customs Tax, accounts for 60% of the cost. With the UK duty escalator set to increase the duty paid on alcohol above the rate of inflation until 2015, the price of wine will continue to rise, the company said.
Source: Accolade Wines
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