Briefing: the cost of wine duty

Overview:

  • At £2.35 per bottle of wine, the UK has the third highest wine duty of any country when compared with EU member states. 15 EU countries, in comparison, have no wine duty.
  • Of the countries that charge alcohol duty on wine, France has the lowest at £0.03 per bottle.
  • Finland and Ireland are the only EU member states with a higher level of wine duty than the UK (£2.98 and £2.77 per bottle, respectively).
  • Wine is also subject to a 20 per cent VAT charge. This charge is levied after wine duty has been applied. This adds £1.31 to the cost of an average bottle of wine. Without VAT the average bottle would cost £6.54.
  • If VAT was charged before wine duty was applied, it would reduce the cost of the average bottle of wine from £7.85 to £7.38, a saving of £0.47.
  • Without wine duty the average cost of a wine bottle would be reduced from £7.85 to £5.03, a 36 per cent decrease.[1]
  • Wine duty accounts for 30 per cent of the cost of the average bottle of wine. This is more than double the amount beer duty makes up of the average pint at 13 per cent.
  • Tax, alcohol duty and VAT combined, makes up almost 47 per cent of the cost of an average bottle of wine. Without tax, the average bottle would cost £4.19. In comparison, total tax on a pint of beer is equivalent to 29 per cent of the total cost.
  • In 2023-24, wine duty raised over £4.6 billion in receipts.[2] This is equivalent to wine duty receipts from almost two billion average bottles of wine. Wine duty raises the most alcohol duty receipts, being almost £1 billion more than beer duty and £476 million more than spirits whose duty raised the third and second highest amounts respectively in 2023-24.

 

READ THE BRIEFING NOTE

 

[1] Arthur, R, Alcohol duty frozen in the UK until 2025, 06 March 2024, www.beveragedaily.com/Article/2024/03/06/Alcohol-duty-frozen-in-the-UK-in-Spring-Budget-2024, (accessed 15 August 2024).

[2] HM Revenue & Customs, Alcohol Bulletin commentary (February to April 2024), 31 May 2024, www.gov.uk/government/statistics/alcohol-bulletin/alcohol-bulletin-commentary-february-to-april-2022, (accessed 16 August 2024).

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