Spanish Wine Exports Plummet as UK Alcohol Tariffs Bite

British alcohol tariffs are causing significant disruption to Spanish wine exports, with a notable 7.5 per cent decline in value during the first four months of this year. The implementation of alcohol content-based tariffs from the autumn budget has particularly impacted Spanish vineyards, known for their fuller-bodied wines.

The Spanish Wine Interprofessional Organisation reports exports to Britain, Spain’s largest market for still wine, have dropped to €111 million following February’s duty changes. This decline stands in stark contrast to Spanish wine performance in the United States, where exports rose 9 per cent to €119.6 million amidst growing importer demand.

Under the new taxation framework, wines containing up to 12.5 per cent alcohol have experienced minimal duty increases or even reductions. However, wines exceeding this threshold—predominantly Spanish reds—face substantially higher levies. Industry expert Nicola Thornton of Spanish Palate emphasises the dramatic impact on pricing structures, noting that alcohol content has become a primary consideration in trade discussions.

José Luis Benítez, director of the Spanish Wine Federation, reveals British importers are now paying approximately 20 per cent more for affected red wines. The revised tax system appears to favour beers and certain sparkling wines, placing Spanish producers at a distinct disadvantage in the UK market.

The autumn budget modifications included duty reductions for lighter and draught products, while sparkling wine received a 2p tax reduction, bringing duty to £2.65 per 75cl bottle. This aligns with duties on 12 per cent still wine bottles, potentially benefiting Britain’s growing domestic sparkling wine sector, though only 8 per cent of UK wine production was exported in 2023.

Richi Arambarri, chief executive of Rioja-based Vintae, acknowledges the significant market disruption, noting that while importers are increasingly seeking lighter wines, consumer preference remains steadfast for fuller-bodied varieties where alcohol content plays a crucial role in character development.