Brit booze tax backlash buys time for SA wine exporters

A move by the British government to stave off a political backlash over alcohol taxes could buy SA producers precious time to plead for relief too.

South Australian wine exporters will enjoy a brief reprieve from potentially crippling British alcohol taxes as authorities ramp up their lobbying for further cost relief.

Britain, which has the biggest Australian wine market, had planned a new excise duty system, or booze tax, on alcohol content per drink from February next year.

But the new British government will now delay changes for at least 18-months in a transition to appease a backlash.

Under the changes any beverage with an ­alcohol by volume level above 11.5 per cent will pay more tax, which experts say would leave Australian wines particularly more expensive.

A British consultation paper last week revealed concerns it would “undermine” the new UK-Free Trade Agreement and “outweigh the benefits” of cutting tariffs, or an import tax on goods or services.

Federal and State Government Ministers along with diplomats will now lobby British authorities for further relief.

British PM Liz Truss tours the Osborne shipyard in Adelaide during her previous role as UK Foreign Secretary. Picture: Tricia Watkinson

Industry leaders say wine alcohol levels are volatile due to changing weather patterns.

The Queen’s death and British Prime Minister turmoil has stifled lobbying efforts.

Senior government sources believe new UK Prime Minister Liz Truss, who visited SA as Foreign Secretary earlier this year, is sympathetic.

Figures show UK exports were worth $421m last year, two thirds of which from SA.

Trade Minister, SA Senator Don Farrell, said the wine tax issue was different from the FTA. It is understood will hold talks with new UK Trade Secretary Kemi Badenoch in coming weeks. “The Australian Government continues to raise concerns on behalf of the … wine industry,” he said.

“The UK authorities are aware of our position and discussions are ongoing.”

State Trade and Investment Minister Nick Champion, who has also written to British officials, said UK consumers were a “vitally important market”.

“We’ve … raised concerns over the potential detrimental impact these reforms will have for our wine producers,” he said.

“While we support key elements of the UK’s plan to simplify the tax system, increasing the duty on our exports will make it more difficult for our exporters following an already difficult couple of years.”

SA Agent General, David Ridgway, said the delay was “a perfect opportunity to continue to prosecute the case for a fairer excise regime for South Australian producers”.

Deputy Premier Susan Close was unable to meet UK government officials in London last month due to the Queen’s official mourning.

Labor MP Leon Bignell, whose Mawson electorate represents the McLaren Vale area, faced similar challenges in July amid UK PM turmoil. “That’s why it is important we work together … to convince the new UK government that this wine tax is a bad idea,” he said.

Adelaide Hills Wine Region board president, Alex Trescowthick, said paying more tax would have a “negative impact on winemakers”.