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WSTA warns that new EU rules risk price hikes

The Wine and Spirit Trade Association (WSTA) is warning that changes to customs classifications at EU level could lead to an increase in excise duty and VAT for some made-wine products, creating significant confusion for producers in the UK.
The latest changes mean that some ready to drink products produced or sold in Europe - including those made with cream and some cocktail drinks - might lose their ‘made-wine’ classification.   Products affected by the change will be classified as ‘spirit drinks’ thereby facing an increase in excise duty and VAT.  The changes are likely to ultimately lead to price increase for consumers.
The new classifications are expected to lead to yet more confusion and delays for producers with many now having to consult with HMRC to confirm the revised status of their product.  Over the coming weeks, distributors and retailers will gradually be made aware of which products are affected and the scale of product price rises.
WSTA CEO Miles Beale said: “This latest change from the EU means that the dividing line between a product being classified as made-wine or being re-classified as a spirit is now very fine.
The proposals are causing serious confusion for our members' businesses.  Our members are seeking clarification from HMRC as to where their products now stand and will communicate any price changes to retailers and consumers as quickly as possible.”

13 March 2013 - Felicity Murray