February saw changes for the alcohol industry come into force that particularly affected winemakers.
A temporary easement has been in place for wine that has treated wines with an alcohol by volume (abv) between 11.5% and 14.5% as if their abv was 12.5%. It was announced in the 2024 Autumn Budget that the easement would end on 1 February 2025.
There have been calls to make the easement permanent, however the government has confirmed that the easement would end as planned.
This means that the wine duty for all wine will now be based on its alcoholic strength. The duty rate changes at each 0.5% abv, meaning that there are now 30 different payable amounts replacing the single rate under the easement. Wines with an abv below 11.5% and above 14.5% were already being taxed by strength and this will continue.
In addition to this change, duty rates on all non-draught alcohol products rose in line with the Retail Price Index (RPI) from February 2025.
Small producers of non-draught products have seen an increase in their cash discount to bring them in line with the relief for draught products.
There has also been a 1p duty cut for draught pints.
These changes mean that there could be benefits for businesses in the hospitality trade from using small producers. Higher strength wines will become more expensive and so businesses will need to be alert to ensure that costs are passed on appropriately.
See: https://www.gov.uk/government/publications/changes-to-the-rates-of-alcohol-duty