UK wine imports decline after new alcohol-based tax system takes effect in early 2025

The United Kingdom’s new wine tax system, which came into effect in February 2025, has coincided with a notable decline in wine imports. Official data published on Monday, July 7, by market analyst delReyAWM, for the three months following the implementation of the new tax regime, which now links duties to alcohol content, show a consistent drop in both volume and value of wine entering the UK. While it is still too early to confirm a direct cause-and-effect relationship, the timing of these declines has raised concerns among producers and exporters.

In the months leading up to the tax change, UK wine imports had been growing steadily, with increases ranging from 4.6% in January 2025 to nearly 15% in December 2024. However, after the new taxes took effect, import volumes fell by 8.5% in February, 6.8% in March, and 8.8% in April compared to the same months a year earlier. The value of these imports also dropped by 9.9%, 6.4%, and 7% respectively over those three months. These declines contrast with previous months that saw both growth and minor losses.

Average prices for imported wine, which had been falling before the tax change, have started to rise slightly on a monthly basis—up 0.5% in March and 2% in April—though overall prices for the January-April period are still down by 1.2%, averaging £3.02 per liter.

Looking at the first four months of 2025 as a whole, UK wine imports fell by 5.2% in volume and 6.3% in value compared to the same period last year, totaling 354 million liters and £1.07 billion. This negative trend is not entirely new; since the UK’s exit from the European Union at the end of 2020, annual import volumes have generally declined from over 14 million hectoliters to just 12.4 million as of April this year. The value of imports had remained more stable until recently but has now dropped from over £4 billion to around £3.8 billion annually.

Breaking down imports by category reveals that non-sparkling bottled wines have suffered the most significant losses: down 4.6% in volume and 7.2% in value for the first four months of this year, with average prices falling by 2.7%. This category lost more than eight million liters and over £50 million compared to last year’s figures for the same period.

Sparkling wines have held steady in terms of volume at about 40.5 million liters but lost value due to a sharp drop in average prices—down from over £6 per liter to £5.92 per liter—resulting in a loss of nearly £20 million for the quarter. French sparkling wines saw their average price fall by 13%, though they remain expensive at £18.15 per liter on average, while Italian sparkling wines dropped by 6.6% to £3.55 per liter. Spanish sparkling wines increased their average price by 5%, but this did not prevent a steep decline in sales: down 17.3% in volume and 13.2% in value.

Bulk wine imports, which account for more than a third of total volume, fell by 7% but saw their average price rise by 7.5% to £1.20 per liter, keeping total revenue stable at nearly £163 million for four months. Most bulk wine comes from “New World” countries such as Australia, New Zealand, Chile, and South Africa.

Among suppliers, only Australia and New Zealand managed to increase their sales to the UK during this period—Australia up by 9.1% in value and New Zealand by 8.6%. New Zealand’s growth was especially strong in bulk wine sales at lower prices (up 28%), while Australia saw a more modest increase of about 2.7%. In contrast, all major European producers as well as Chile and Argentina saw declines; Chile was hit hardest with drops of nearly 29% in value and over 24% in volume.

Spain experienced larger losses than France or Italy: Spanish wine exports to the UK fell by almost nine percent in value and over fourteen percent in volume during the first four months of this year compared to last year.

South Africa also lost about twenty percent of its export volume but managed a small increase in revenue thanks to higher average prices.

The overall picture shows that since February’s tax changes—now based on alcohol content rather than flat rates—imports have fallen more sharply for non-sparkling bottled wines than for sparkling or bulk wines, with European countries and Chile suffering most while Australia and New Zealand have gained ground.

Industry analysts caution that three months is not enough time to draw firm conclusions about long-term trends or direct impacts from the new tax system alone; other factors such as post-Brexit trade conditions and global economic shifts may also play roles.

However, many exporters are watching closely as further data becomes available later this year to see whether these declines continue or if they represent only a temporary adjustment period following significant regulatory change in one of the world’s largest wine markets.