| Rising levels of wine drinking among middle class professionals have prompted health ministers to support a Europe-wide campaign to lower the minimum strength for a product to be classed as wine from the current 8.5% down to 4.5% alcohol by volume.
Furthermore, they are also said to be pushing supermarkets to stock more low alcohol wines and beers. The UK health minister, Earl Howe has told the Daily Telegraph: “The government has consistently made the case for change to the EU wine rules to permit reduced and de-alcoholized products to be called wines,” according to a report in the Drinks Business.
According to him, the market for low alcohol products has been increasing rapidly in recent years and the promotion of such products would be in consumers’ best long-term interests.
Incidentally, a recent meeting in Brussels concerning the Common Agricultural Policy failed to reach an agreement over a redefinition of what can legally be termed wine, ostensibly due to protests from the Old World countries like France, Italy and Portugal. Howe said that he would still continue to work hard to bring the subject back to the negotiating table.
Low alcohol wines have seen an increase in sales in recent years. Last year UK sales of wine lower than 8.5% abv rose to nearly seven million bottles, two million more than 2011, an increase of 40%, according to DB. On the other hand, it is also argued that non-alcoholic products or drinks with extremely low levels of alcohol are not popular with consumers and retailers are removing them from shelves.
Some producers have lobbied to the UK government to give more incentives to the products in the spread of lower alcohol wines by introducing tax benefits within the current 5.5% abv and 15.5% abv duty bands.
The UK government has found support from the foreign wine producer groups as well. One such supporter is Australian Vintage. Neil McGuigan, CEO of Australia’s third largest wine producing company, with the second largest vineyard holding of 2700 hAs, is recognised as the International Winemaker of the Year by the International Wine and Spirits Competition in 2009, 2011 and 2012 and International White Winemaker of the Year in 2009 by the International Wine Challenge. In May this year he had also called on the UK government to encourage responsible drinking with the creation of an incentive-laced alcohol tax band between 9% and 12% abv, and argued that a shift towards lower alcohol wine consumption would be encouraged by the introduction of an intermediate band without posing such a challenge to quality.
However, he maintained the view that if one brought down the level of alcohol from 13.5% to 5.5% ‘you’ll rip the guts out of the wine.” He suggested instead a tax benefit between 9% and 12%, a level in which ‘one could make lovely wine’. The low alcohol wine category has to improve in quality if it is to become viable and appealing to the consumer taste, echoes Thomas Jung, group chief winemaker at Australian Vintage which has been making low alcohol wines for around 20 years but recently the emphasis has been more on the wines 5.5% alcohol.
In an effort to build support for such a move, not only in the UK market, McGuigan is currently holding discussions with industry bodies including the Wine & Spirit Trade Association and the Winemakers’ Federation of Australia. “We’ve got to show leadership here; prohibition doesn’t work,” he says.
In India, the level of alcohol is generally above 13% and goes up to about 15.5% though there has been no way of confirming it as a majority of the producers post a constant 13 or 13.5% on the label as the standard level of abv. There has been faster growth in the fortified wine category where the alcohol level is 20% or more with addition of Ethyl Neutral Alcohol (Maharashtra already imposes an additional duty on such wines). There are no deterrents for this category-on the other hand there are no incentives on keeping the volume of alcohol lower.
The state governments would do well to keep a watch on the example and efforts of UK to reduce the consumption of alcohol by lowering its content and re-align the taxation policy. The central government also could take the lead by initially reducing the import duties drastically on wines with less than half percentage of alcohol (alcohol free wine) to encourage drivers, pregnant women, and young starters, even thought the flavours may be somewhat negatively impacted.
Since the reduction of alcohol may be also achieved by the reverse osmosis and cone spinning process, the laws should define the parameters of the process and level to which the alcohol may be reduced using this process by the Indian wine industry.
Subhash Arora
Tags: UK, EU, Earl Howe, Australian Vintage, Neil McGuigan, Thomas Jung, Indian wine industry |