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New EU classifications to result in price hike for made-wine products: WSTA

DBR Staff Writer Published 08 March 2013

The introduction of new EU customs classifications may result in increase in excise duty and value added tax (VAT) for some made-wine products, according to The Wine and Spirit Trade Association (WSTA), a UK-based organization representing over 340 wine and spirits companies.

The changes will also create confusion among producers as some ready to drink (RTD) products like cocktails and cream-based drinks will lose their 'made-wine classification' and will be classified as 'spirit drinks' under the new rules.

Producers will then have to consult with HM Revenue & Customs (HMRC) to confirm the revised status of their products, which would result in more delays and confusions.

Also, the products classified as 'spirit drinks' under the new rules could be levied with increased excise duty and VAT, which will finally have to be faced by consumers.

WSTA chief executive Miles Beale said the changed EU rules will now clearly define a product being classified as made-wine or being re-classified as a spirit.

"The proposals are causing serious confusion for our members' businesses," Beale added.

"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."