February saw new changes come into force for the alcohol industry, particularly impacting winemakers.

A temporary easement had been in place for wines with an alcohol by volume (abv) between 11.5% and 14.5%, treating them as if their abv were 12.5%. It was announced in the 2024 Autumn Budget that this easement would end on 1 February 2025.

While there have been calls to make the easement permanent, the government has confirmed that it will end as scheduled.

This means that the wine duty will now be based on the actual alcoholic strength of the wine. The duty rate will change for every 0.5% abv, resulting in 30 different payable amounts, replacing the single rate that existed under the easement. Wines with an abv below 11.5% or above 14.5% have already been taxed based on their strength, and this will continue.

In addition to this change, duty rates on all non-draught alcohol products will rise in line with the Retail Price Index (RPI) from February 2025.

Small producers of non-draught products will see an increase in their cash discount to bring them in line with the relief available for draught products.

There has also been a 1p duty reduction for draught pints.

These changes may offer benefits for businesses in the hospitality sector that use small producers. However, with higher strength wines becoming more expensive, businesses will need to be vigilant to ensure that these costs are passed on appropriately.

See more: https://www.gov.uk/government/publications/changes-to-the-rates-of-alcohol-duty