duty

Booze Cruise Anyone?

It appears that the traditional cross-Channel booze cruise to Calais is making a come back.

The popularity of booze cruises grew steadily throughout the 1980s and 1990s. A perfect storm of cut-price ferry tickets, the opening of the Channel Tunnel, a strong pound, low duty and the removal of limits on the amount of alcohol that could be purchased fueled the rush to Calais. Many of the major supermarkets and wine sellers even had their own bases in Calais to meet demand.

Following on from the global financial crisis, the slump in the exchange rate combined with the increasing competitivity of supermarkets in the UK, meant that the day trips waned in popularity. Even if the ticket price for alcohol was still cheaper across the water, it was no longer economical to make the trip.

However, the recent weakening of the euro against the pound and lower taxes in France mean that filling up your car in France may now be more profitable. The exchange rate is currently around £1 to €1.40. So currently a €5 bottle of wine would cost £3.55. The same €5 bottle would have cost £4.27 in May 2013.

According to Caxton FX there has been a 56% increase over the last two years of Britons buying goods in French Carrefour Supermarkets. The Calais Wine Superstore has reported a 15-20% year-on-year rise in sales which the owner puts down to dedicated shopping trips.

However, if it seems like too much hard work to trek over to France to find good quality wine, please check out our selection of fine wines, which will be delivered direct to your door!

The image is of the iconic P&O ferry, the Pride of Canterbury, by Fabian318 (Own work) [GFDL or CC BY-SA 3.0], via Wikimedia Commons

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Wine Duty

A couple of weeks ago the Chancellor announced a freeze in the duty payable on wine. But what is Duty on wine?

HM Revenue and Customs state that wine Duty is payable on the production of wine or made-wine of more than 1.2% alcohol by volume (ABV).

Wine is defined as a drink produced by fermentation of fresh grapes or grape must.

Made-wine is any other drink – apart from beer or cider – containing alcohol that is made by fermentation, rather than by distillation or any other process. For example, mead is classed as made-wine.

The amount of Wine Duty payable on wine or made-wine is calculated according to its strength and whether it’s sparkling or still.

So, for example, from 23rd March 2015 the duty on wine or made-wine products with an ABV between 1.2 and 4% would attract duty of £84.21 per hectolitre of product. Whereas, the duty on sparkling wine or made-wine with an ABV between 8.5% and 15% is £350.07 per hectolitre of product. A hectolitre is equal to 100 litres. These rates mean that on some £5 bottles of wine, more than half the cost is made up of tax (duty and VAT).

Last year the ‘escalator’ of predetermined annual increases for alcoholic drinks was scrapped but wine duty still rose with inflation. The freeze this year has been welcomed by the wine industry but according to the ‘Drop the Duty’ campaign, wine has not received a tax cut since 1984. By contrast, duty on spirits and cider were cut by 2% and beer by 1p per pint in the most recent budget. It is also noteworthy, that the UK has the second highest rate of wine duty in the EU, with only Ireland having a higher rate.

However, while not enjoying a cut in duty, the UK’s 30m wine consumers can at least know that they will not pay more duty for a time and at least until well after the general election.

Image is “Freyburg – Weinberg über der Unstrut” by FranzfotoOwn work. Licensed under CC BY-SA 3.0 via Wikimedia Commons.

Beer Sales Rise But Is Wine Now The Nation’s Favourite?

The Campaign for Real Ale (CAMRA) has done a phenomenal job. Since the 1970s they have tirelessly campaigned for Real Ale, with a membership of well over 150,000 people making it the largest single-issue consumer group in the UK.

Unfortunately, their great work has not stemmed the flow of pub closures and declining sales. Since the start of the 1980s the number of pubs in the UK has declined by 29% and in the last fifteen years annual sales have dropped 23% according to the British Beer and Pub Association (BBPA).

So it was with some justifiable cheer the BBPA reported last year that sales of beer had increased 1.3%, the first rise since 2006.

This positive news for beer is now being overshadowed by a survey conducted by YouGov and Populus. Of the 4,000 people surveyed around 60% declared wine to be their preferred alcoholic drink.

The FT quoted Matthew Jukes, an influential UK wine critic, as saying:

“This polling finally dispels the myth that wine is elitist. It is the most popular alcoholic drink in the UK, which makes the fact that it is so highly taxed a complete anomaly”

His comments reference the fact that for a £5 bottle of still wine, £2.88 (57.7%) of this is tax (duty and VAT). The last time duty on wine was reduced was 1984, when it was cut from £1.13 to 90.5 pence. In the 30 years since that cut duty has more than doubled to £2.05 (127% increase).

Perhaps this poll is not enough for the wine industry to claim they now produce the UK’s most popular alcoholic beverage. However, anyone believing that wine drinkers in the UK are generally middle class is probably now clinging to an outdated stereotype.

Get in touch and let us know whether or not you think wine is now The Nation’s favourite.

Image is “Red Wine and Bokeh” by Bas Leenders is licensed under CC BY 2.0

Britons To Spend More On Wine Than The French

Since the credit crunch of 2008 we might be drinking less in Blighty but that hasn’t stopped the value of the UK wine market increasing by 15% to around £10.6 billion in 2014.

At this point, you could rightly conclude that if we are drinking less wine but spending more then its because of tax.

Tax on wine has gone up considerably in the UK since 2008, by almost 60% (£1.56 to £2.47 inc. VAT). Thats quite a lot, and the third highest in Europe behind Ireland and Finland (they have VAT at 23% and 24% respectively!) In France you’d pay just 3 pence in duty on a bottle of wine… sigh…

However, its not just tax, our spending habits have changed. Apparently the biggest growth is in the premium wines area for bottles costing between £7 and £14.

So we are drinking less but prepared to spend more to get a better product. If we continue to do that then by 2018 we will be spending £11.3 billion a year according to forecasts by Vinexpo, and we will have displaced France as the world’s second biggest still wine market. The US is the biggest and currently bigger than the French and British markets combined.

Full story in the FT.