Small producers lose out as wine giant blames Labour’s alcohol duty shake-up for delistings.
Majestic Wine has been forced to pull bottles from small, independent vineyards off its shelves, warning that a barrage of new taxes imposed by the Labour Government has rendered many wines unprofitable to sell.
John Colley, chief executive of the high street wine retailer, said that recent changes to alcohol duties had left the company with no choice but to be “a bit more picky” with its offering, cutting off smaller producers and leaving popular bottles delisted.
He told The Telegraph:
“Typically you would range some of these wines for consumers because they love them. But it becomes much more a commercial decision with the changes being brought in. That’s the sad thing.”
Under the previous system, wines with an alcohol content between 11.5% and 14.5% ABV were taxed at the same rate. Labour’s reforms, introduced in February, now calculate tax based on the exact alcohol strength of each product, drastically increasing costs for stronger wines and adding a layer of complexity for retailers.
Mr Colley said the new rules disproportionately affect smaller vineyards and limited-run bottles that are popular with customers but don’t deliver sufficient volume to justify the growing administrative burden.
“If you’ve got something that just doesn’t make sense because the volumes are so small and the cost of administration [has risen], there’s an impact. You just can’t make any money from doing it,” he explained.
He added:
“We’ve spent hundreds of thousands of pounds on systems just to manage it, it’s that complex.”
The shake-up, which was pushed through by Labour despite warnings from across the industry, is now having tangible effects. Wines from artisan producers and smaller vineyards — many of whom rely on UK distribution through firms like Majestic — are quietly disappearing from shelves.
Majestic, which operates 213 stores across the UK, has made clear that the changes won’t drastically affect casual shoppers, with over 1,300 wines still available. But those looking for specific, often niche or premium bottles will find some favourites gone.
“We still have over 1,300 in our offering,” said Mr Colley. “The added advantage that we have in Majestic is we’ve got trained and qualified experts, so if we haven’t got a specific Amarone that they were after, we have got an alternative.”
The company has continued to grow, recently acquiring drinks wholesaler Enotria & Coe and bar group Vagabond Wines. However, Mr Colley warned that ongoing tax increases — including the rise in employer National Insurance contributions this month — are beginning to bite.
“We’re having to be a little bit more picky about types of shops for opening,” he said. “It’s not insignificant. We’ve had to cut our cloth accordingly within our retail business model. The sad thing is that the changes made affect workers.”
Critics argue that the Labour Government has pressed ahead with tax reforms without understanding the realities of running a business. Notably, not a single Labour frontbencher has ever run a business — a fact that is increasingly being pointed to as tensions grow between government policy and private enterprise.
Despite the concerns raised by retailers and vineyards alike, a government spokesman defended the changes, stating:
“The alcohol duty reforms have modernised and simplified the duty system, prioritising public health and incentivising consumption of lower strength products.
“We continue to work closely with the wine sector to drive growth, support high-quality jobs and identify opportunities to export the UK’s fantastic wines across the world.”
But for small wine producers now cut off from the UK high street and for retailers absorbing soaring costs, many fear the damage may already be done.
Read the full story in the Telegraph here.
