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Majestic axes small vineyard wines in wake of duty reforms
Small vineyards are seeing the crippling impact of new tax rules on alcohol which came into effect in February, as specialist wine retailer Majestic announced it has pulled a number of wines from smaller producers off its shelves. The post Majestic axes small vineyard wines in wake of duty reforms appeared first on The Drinks Business.
Small vineyards are seeing the crippling impact of new tax rules on alcohol which came into effect in February, as specialist wine retailer Majestic announced it has pulled a number of wines from smaller producers off its shelves.
John Colley, chief executive of Majestic, told The Telegraph that the retailer has axed a number of wines from small producers following the new tax rules which came into effect in February.
Colley said it was a "sad thing" that the retailer was being squeezed as a result of reforms.
He said: “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."
Small vineyards will face the biggest impact as a result of the tax changes due to higher administrative costs and comparatively small volumes. Colley explained: “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."
Former Prime Minister Rishi Sunak devised the alcohol duty reforms in 2021. Industry representatives have continuously lobbied against the new duties, which tax alcohol depending on its ABV, making the process of calculating costs significantly more complicated for businesses.
“We’ve spent hundreds of thousands of pounds on systems just to manage it, it’s that complex," Colley said.
Colley warned last year that some of shoppers’ favourite wines “could increase in price, or at worst disappear from shelves altogether” because of the changes to alcohol tax.
The Majestic chief executive has also criticised other tax increases levied on businesses this month, including the rise in employers’ National Insurance contributions. Majestic said last July that it was eyeing 125 new locations for retail stories to double down on bricks-and-mortar expansion. Now, Colley has said the retailer is 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.”
Majestic still offers more than 1,300 wines in its range. Colley assured customers that products which have been delisted will not leave a gap in the retailer's offering. He said: "If we haven’t got a specific Amarone that they were after, we have got an alternative.”
A government spokesman told The Telegraph: “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.”
John Colley, chief executive of Majestic, told The Telegraph that the retailer has axed a number of wines from small producers following the new tax rules which came into effect in February.
Colley said it was a "sad thing" that the retailer was being squeezed as a result of reforms.
He said: “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."
Small vineyards will face the biggest impact as a result of the tax changes due to higher administrative costs and comparatively small volumes. Colley explained: “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."
Former Prime Minister Rishi Sunak devised the alcohol duty reforms in 2021. Industry representatives have continuously lobbied against the new duties, which tax alcohol depending on its ABV, making the process of calculating costs significantly more complicated for businesses.
“We’ve spent hundreds of thousands of pounds on systems just to manage it, it’s that complex," Colley said.
Colley warned last year that some of shoppers’ favourite wines “could increase in price, or at worst disappear from shelves altogether” because of the changes to alcohol tax.
The Majestic chief executive has also criticised other tax increases levied on businesses this month, including the rise in employers’ National Insurance contributions. Majestic said last July that it was eyeing 125 new locations for retail stories to double down on bricks-and-mortar expansion. Now, Colley has said the retailer is 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.”
Majestic still offers more than 1,300 wines in its range. Colley assured customers that products which have been delisted will not leave a gap in the retailer's offering. He said: "If we haven’t got a specific Amarone that they were after, we have got an alternative.”
A government spokesman told The Telegraph: “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.” 
