The British tax changes have a major impact on the Spanish wine industry

Spanish winemakers are warning of an export crisis after the UK’s new alcohol-based wine tax, introduced in February 2025, triggered a sharp 7.5 per cent drop in Spanish wine exports to Britain – their largest still wine market.

According to Reuters Data cited by Spanish Wine Interprofessional Organisation, the value of Spain’s wine exports to the UK fell to €111 million in the first four months of 2025, outpacing declines from both France (-6 per cent) and Italy (-6.7 per cent).

New UK tax targets high percentage wines

The UK’s new tariff system taxes wine according to alcohol content rather than volume. As a result, Spanish reds – known for their higher alcohol content due to warmer growing conditions – are now “most penalised by the tax increase,” said José Luis Benítez, director of the Spanish Wine FederationCitation: Majorca Daily Bulletin.

Benítez noted the system “favours beers… and some sparkling wines,” further squeezing Spain’s export competitiveness in a post-Brexit market already hit by increased paperwork and costs.

British importers must now pay more for wines above 12.5 per cent alcohol – a category that includes many classic Spanish reds. These tax increases drive retail prices up, and damage long-standing trading relationships.

Spanish wine exporters claim they are losing market share in Britain due to new pricing pressures. “It makes our prices higher,” said Nicola Thornton founder of the Spanish Export Company Spanish Palate. “The tax will definitely be a discussion that is in the forefront. Everyone asks: “What’s your alcohol level?”

British buyers are reportedly paying around 20 per cent more for many full-bodied reds, which has triggered a move by some importers toward lighter wines (11.5–12 per cent ABV) – a shift that may not sit well with traditional consumers.

The US market opens up

While UK sales have dropped, Spanish wine exports to the US rose 9 per cent in the same period to €119.6 million, driven by strong importer demand and fears of possible future US tariffs. However, experts warn that this might not be enough to compensate for the UK drop.

This shift in UK policy on taxation could have global consequences. As climate change continues to raise grape sugar levels – and therefore alcohol content – wine producers in warmer regions like Spain may face more regulation-induced hurdles in the years ahead.

Should climate and tradition of a nation be taxed? Or should the wine tax reflect more than the alcohol percentage?

Browse all Business News.