In the run up to
Christmas the Wine and Spirit Association has been running promotional
campaigns in support of fortified wines whose UK sales have been plummeting. Along with the Sherry campaign,
there were also “Keep Passing the Port” and “Value Vermouth”. Over half of
annual UK sales of fortified wine are made in December, so these campaigns have
been carefully timed. The figures are extremely depressing and most of the
blame lies with excessive taxation.
In 2005 UK sales of Sherry were over 22 million
bottles while in 2015 they had fallen to barely 10 million bottles, while the
fortified sector as a whole has seen sales fall by 35%. At the same time steady
increases in excise duty (53%) left Sherry at the point where 59% of the cost
of an average bottle was tax. Half of Europe pays no excise duty at all, only
VAT.
The UK Treasury operates an outdated and unfair
taxation regime which particularly hurts fortified wines, and this not only penalises
the consumer but also employment. Some 270,000 people are employed directly or indirectly
by the UK wine trade which generates some £17.3 billion in economic activity.
It has been proven that every tax increase brings with it a commensurate drop
in Exchequer receipts, yet the Government seems incapable of leaving excise duty
alone. Let us all hope these campaigns bear some sort of fruit. At least Sherry is still outstanding value for money.
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