The hospitality and retail sector continue to be plagued with problems, from staff shortages to supply chain chaos. However, pop open the (English) bubbly! As there is hope to be had where British booze is concerned!
Rishi Sunak plans to unveil a landmark overhaul of the way alcohol is taxed on the 27th of October. The current system has long been held in contempt by treasury officials, who regard the system to be “outdated, complicated and full of anomalies”. It’s an issue that was addressed in the Conservative election manifesto back in 2019, however, the pandemic put this review on the backburner.
Nevertheless, amidst rising prices and inflation, this revamp can’t come soon enough for the hospitality and retail sectors, who are in dire need of some relief. So, what is the overhaul expected to unveil?
A report revealed that Sunak plans to scrap the premium on sparkling wine, which will result it an 83p reduction on any bottle of Champagne or Prosecco. It is also expected that Sunak will buck former EU laws on equal tax and place English Sparkling Wine centre stage, giving this bubbly beverage a tax advantage over other foreign competitors.
Unfortunately, the tax pendulum is set to swing both ways, with foreign, specifically expensive red wines, attracting more duty. There is little information on how the price of beers will be affected, however, this ‘levelling-up’ system will most likely give favour to British beers. And with soaring energy bills and supply shortages forcing publicans to increase pint prices by 30p, making the average cost at your local roughly £6, it seems British booze is the way forward.
However, before you go loading up your Christmas trolley with English Sparkling Wine, it is uncertain when these reforms will be implemented. Many wholesalers, retailers, restaurants, hotels, etc. have already solidified deals and printed price lists ahead of Christmas. It is likely there will be a delayed reaction to this new system, which may lead to a distortion in consumer purchasing behaviour, who are expecting to see an imminent price change upon the release of the review.
We can only hope that some of these positive changes will be able to infiltrate the sector before Christmas, and that these reforms help bolster the hospitality and retail sectors come January and February, which are traditionally the ‘slowest’ months in the drinks sector.
As we look toward the future, these reforms will hopefully shed light and new possibilities on the production of alcohol in Britain. Giving rise to an investment in British booze that may help it to compete on a global scale. Something I’d be happy to raise a glass to, especially with Denbies Wine Estate down the road from Jellybean Towers!