Hallgarten & Novum Wines Duty Support in August 2023
As you will be aware there are some significant changes in alcohol duty that will come into effect on 1st August. They are the biggest changes that the trade has experienced since 1975.
In very simple terms, the changes mean the following, for the majority of wines:
- An increase in duty of £0.44 per 75cl for most still wines.
- A reduction in duty of £0.19 per 75cl for most sparkling wines, including Prosecco.
Full information can be found on the government website by clicking below.
We have looked at the practical implications of the duty change, and it is clear that the timing of this change, at the height of the summer season, is unwelcome, particularly for the hospitality sector. Therefore, the support we are offering, detailed below, is aimed at helping you delay the changeover until September, which for most is a far more natural time to introduce any changes to your wine range.
Our aim is to reduce the operational impact upon your business and, as we see it, you have the following options to consider if you are to minimise disruption whilst protecting your margins over the summer.
- Simply apply the duty change on 1st August and reflect that in your selling prices, either on your wine list or on the shelf. This is likely to be the choice of many of our Off Trade customers.
- Do nothing, with the hope that within your business, the gains in Prosecco and other sparkling wines will balance out the losses on still wine. Unlikely for most customers, but possible.
- For some customers, an option might be to stock up in July to get you through August, thus deferring the need to change your list prices until September.
- Many of you, however, will either have limited storage capabilities precluding you from stocking up, or you will simply not be able to tie up the cash needed to purchase additional stocks. This leaves you facing either having to change your list at the worst possible time of the year, or see your margins erode for a good 4-6 weeks.
This fourth option is where we are focusing some help for you.
We cannot absorb the duty rises imposed. However, by clearing a proportion of our UK stockholding from our bond in July, in advance of the Duty rises, we are able to offer you a significant amount of stock at pre Duty increase pricing, during the month of August. Our hope is that combined with the reduction in duty for sparkling wines, our help will enable you to hold prices through August without damaging your profitability.
In terms of detail, our aim is to support the ‘sharp end’ of your range, namely wines selling on restaurant wines lists at under £35 and on the shelf at up to £14. The scheme will credit you for the duty increase (44p per bottle ex VAT) on August sales of 75cl bottles of still wines being sold to duty paid customers which lie between 11.5% and 14.5% ABV. The list of wines which will attract this support amounts to 148 and, we feel, covers all bases of this key price range.
Please note that you will need to complete and submit the below online application form to opt-in to this support by the end of June. The scheme is subject to a minimum purchase of qualifying wines per customer of 60x75cl bottles over the month of August, and limited to a maximum of 1,200x75cl bottles. A full list of the qualifying wines can be found on our website; note that stock is finite and subject to availability.
As you will appreciate, managing this scheme requires considerable planning, as does ensuring that we will have the right resources in place over the holiday season to fully support you should you decide to change your list in August. It would be incredibly helpful to know what your plans are, so that we can manage the transition as smoothly as possible without disruption for your business. We would appreciate as much advance notice as possible, particularly regarding when you wish to re-write your wine list, and your account manager will be in touch to discuss options with you.
We hope that this offer is of assistance to your business, and please keep in touch with us regarding your plans for the coming months. If you have any questions, please read our FAQ below.
The list of available 148 still wines is split between 64 White, 11 Rosés and 73 Reds. See the full range below.