SAFG - Wine Brochure - Sept Oct 2023

New duty
increases
As of the 1st August 2023, the new alcohol duty bands
have come into force from the Government. This may
leave you pondering ‘What does this mean for my
wine list pricing?’ We hope the following can help
you understand the changes and how you can best
adapt your pricing to protect your profit numbers.
The government has introduced a new tax structure
which will result in an increase in cost on most still
wine but favours sparkling and low ABV products.
Still wines
At 10.5% ABV the duty cost has risen by £0.01 per
bottle and at 11% ABV by £0.12 per bottle.
Wines between 11.5% – 14.5% incur a £0.44 per bottle
increase.
Wines from 15% - 22% have increased relative to their
ABV level, starting at +£0.97 per bottle if the wine
is 15% and wines at 22% will see a £1.72 per bottle
increase. This increase will affect all fortified wine
(Port, Sherry etc.)
The vast majority of still wines imported into the UK
sit between 11.5% and 14.5% ABV. Wines within this
ABV range will incur a cost price increase of 44p per
bottle.
To maintain your cash margin, we advise that you
take this increase and add VAT (do this by multiplying
£0.44 by 1.2) and then add this to your selling price
per bottle.
Adding at least £0.53 per bottle to your selling price
will maintain your cash margin, however your GP %
margin will fall.
However, there is some good news amongst the
doom and gloom. You will make savings on your
Champagne and sparkling wines.
Sparkling wines now benefit from the same duty rate
as still wines between 11.5% and 14.5% ABV resulting
in a cost price decrease of £0.18 per bottle. Previously
the rate of duty paid on sparkling wines has been
higher than still wines as it was viewed as a luxury
product.
Sparkling wines at 11% ABV have reduced in cost by
£0.50 per bottle, this includes many Proseccos.
Still wines below 10% have reduced in cost relative to
the ABV %.
The cost of a wine with 10% ABV has been reduced by
£0.10 per bottle and at 9.5% by £0.20 per bottle.
These changes are likely to remain in effect until
February 2025. If you have any queries regarding the
duty change, please do not hesitate to contact your
WDM or SDM who will be on hand to help.
Place your order today on 0345 241 1122 5