The big news this week will obviously be the amount of extra duty Alistair Darling dares to put on wine. Over the last few years the Chancellor has largely chosen to leave spirits and sparkling wines alone, but has consistently loaded the duty onto still wine. This year however we are expecting a hike on everything as he seeks to mollify the health lobby and refill the government’s coffers.
When you read that there has been x pence (insert the final number) added to a bottle of wine, what won’t be made clear is that we also have to pay VAT on that tax. This means that when a customer buys wine they use their taxed income to pay a tax, with a further value-added tax on top of that! All this means we are holding our breath until 12.30 …
… [Update, 1.45 PM, Wednesday 12th March] The numbers are now available following the Chancellor’s speech. Duty on still wine rises by 14p per bottle (remember this is a rise in the cost price to us and all our competitors, not simply the retail price), 55p on spirits, 4p on a pint of beer and 3p on cider. Not perhaps as bad as we feared, but still punitive.
… [Update, 10.04 AM, Thursday 13th March] Some good news. Although the duty increase applies from midnight on Sunday, Majestic will not be changing any prices until at least 7th April. Despite our best efforts there will have to be some changes thereafter, so our recommendation is to shop now and beat the budget.