Tax cut on bottle of wine may be only a modest 25p

Calculations by the wine trade now suggest the reduction in excise duty which the Government could be forced to implement will only be a sober 25p for each bottle of wine. The Government is expected to yield to pressure from Brussels that the duty on wine should be equivalent to the excise level on beer.

The good news is that for spark ling wines, the reduction should be more than £2 a bottle, and since any such measure would likely be announced in the December 1st budget - with excise changes taking immediate effect - it may yet be possible to celebrate the millennium with duty-cheap champagne.

This last anomaly arises because of the staggeringly higher level of duty on sparkling wines - "a tax on bubbles" in the words of Ireland's wine lobby.

A report from Brussels on Monday correctly calculated that a litre of 4 per cent-proof beer attracts 62p excise duty, but the projected benefit of equivalent duty for wine ignored the fact of the latter product's much higher alcohol content.

Nevertheless, the news that Brussels is exerting pressure for equivalence has been welcomed by the Wine and Spirit Association, which has long lobbied for such a move. It has also been well received in the new Dublin outlet of Berry Bros & Rudd, the venerable English wine merchants which has discreetly opened (for the first time outside London) in the old Weights and Measures office in Harry Street.

Berry Bros ("Established in the XVII Century," according to the sign) will welcome any excise duty cut in the context of its more modestly priced wines, which start at £5.95. For some other products, however, like a mid-1980s Mouton Rothschild, the reduction will not make much of a dent in the price of £700 a bottle.

And it will make no difference at all to a bottle of Chateaux Margaux 1945. One of these can fetch anything from £10,000 upwards at auction, and the Dublin outlet has some of the stuff in the cellar. However, according to the man behind the counter, it's not for sale at any price.