The changes mean that some ready-to-drink products produced or sold in Europe - including those made with cream and some cocktail drinks – might lose their ‘made-wine’ classification.
Products affected by the change will be classified as ‘spirit drinks’ thereby facing an increase in excise duty and VAT. The changes are likely to ultimately lead to price increase for consumers.
The new classifications are expected to lead to yet more confusion and delays for producers with many now having to consult with Her Majesty’s Rvenue & Customs (HMRC) to confirm the revised status of their product.
Distributors and retailers will be made aware of which products are affected and the scale of product price rises.
WSTA chief executive Miles Beale said: “This latest change from the EU means that the dividing line between a product being classified as made-wine or being re-classified as a spirit is now very fine.
“The proposals are causing serious confusion for our members' businesses. 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,” said Beale.
* According to the HMRC made wines is:
"Made-wine’ means ‘any liquor which is of a strength exceeding 1.2 per cent and which is obtained from the alcoholic fermentation of any substance or by mixing a liquor so obtained or derived from a liquor so obtained with any other liquor or substance but does not include wine, beer, black beer, spirits or cider’.
Made-wine, for example, will include products similar to wine but not made from fresh grape and some ‘ready to drink’ products (RTDs) that are made using fermented alcohol."