On 1 February 2025, the UK wine industry faces one of its most significant tax shifts in decades. The end of the wine duty easement and the introduction of a graduated duty system will replace the flat rate historically applied to wines between 11.5% and 14.5% ABV. With up to 30 different tax brackets now determined by alcohol strength, the impact on pricing, portfolios and trade strategies will be felt across the sector.

At the centre of this change is Hallgarten & Novum Wines, a leading UK importer that has spent the past year preparing for the shift. Managing Director Andrew Bewes described the dual effect of the new system and the accompanying 3.65% duty increase as a “material impact” on both their offerings and their customers’ wine lists. “Wines with higher alcohol content, such as fuller-bodied reds, are set to rise significantly in cost,” he said.

Adapting to a complex duty structure

Previously, wines within a broad ABV range were taxed at a uniform rate, offering simplicity and predictability. But under the new model, the cost of a bottle with 14.5% ABV will rise from £2.67 to £3.21, disproportionately affecting wines with higher alcohol levels.

Anticipating these shifts, Hallgarten has taken proactive steps. “For the past 12 months, we have been expanding our portfolio to ensure that we have wines to offer to all sectors of the market, at all price points,” Bewes explained. “We have also been working with our producers to reduce the ABV wherever possible, with the absolute proviso that quality and style are not adversely affected.”

Wines at lower ABVs, such as 12.5%, will now appear more attractive from a value standpoint, he said. “If there are two wines on a wine list at the same price, one at 12.5% ABV and the other at 14.5%, then it would be safe to assume that the wine at 12.5% ABV offers greater value.”

Communication and customer support

Hallgarten has rolled out a clear and accessible communication strategy to help its trade partners understand the changes. Email bulletins, social media guidance and internal sales team training have all played a role. The company’s Annual Tasting event, scheduled for later this month, will provide a platform for in-person discussions, equipping restaurateurs and retailers with practical tools to recalibrate their offerings.

While the changes have prompted concern across the industry, Hallgarten’s approach has been pragmatic. “Our restaurant customers may see some of their favourite wines fall out of range, but we’ll always have viable alternatives,” said Bewes. “So, if our restaurant customer currently has a choice of 20 wines from us which could sell at between £36 and £40 on their wine list, they will still have 20 wines post-February 1st, but they will largely be different wines to the 20 currently on offer.”

Navigating through uncertainty

The broader implications for the UK wine trade are not lost on Hallgarten. Bewes described the duty overhaul as “a huge setback” for the industry, compounding existing pressures such as inflation and post-Brexit trading complexities. Still, the company’s response underlines a key message: adaptability and preparation are the best tools to meet regulatory change.

Hallgarten’s diverse portfolio has become a cornerstone of its response, giving the business the flexibility to shift emphasis and pricing without sacrificing quality or customer experience. “Whilst the increase in price of Wine ‘A’ might be unworkable for an existing customer, we will always have a Wine ‘B’ to offer which can fill that slot,” Bewes assured.

A new pricing era for UK wine

As the UK wine duty changes take effect, the trade is bracing for short-term disruption. Higher-ABV wines will become more expensive, wine lists will evolve, and consumers may need to adjust their expectations. However, the commitment of key players like Hallgarten to thoughtful portfolio management, customer education, and innovation signals a pathway forward.

In this new era of granular tax regulation, success will rely not just on what wines are offered—but how they are positioned, priced and explained. And with partners like Hallgarten already paving the way, the industry may be better equipped to weather the storm than expected.