Cuisinewine, supplier of alcoholic ingredients, is developing a VAT and duty-free vodka for a leading manufacturer of ready meals - in a bid to "substantially" reduce ingredient costs.
The vodka is being trialled in Bakkavör's ready meal spaghetti sauce, which it makes under own-label for Marks & Spencer. Bakkavör used to buy vodka in a beverage form, which meant that alcohol duty and VAT applied - raising costs - according to Cuisinewine.
However, by adding a pine extract to the spirit under intense heat to alter its viscosity and form a vodka gel, the taxes no longer apply as the gel is classified as a condiment, added Cuisinewine. "Manufacturers can save up to £5 per litre on spirit-based ingredients," said Roland Beumer co-director of Cuisinewine.
"The extract does not change the taste or the alcohol content of spirits, and as soon as the product is re-heated the honey-like substance returns to a beverage-like viscosity." Claiming back VAT on alcoholic ingredients in food processing is a timely process that usually takes around three months, he added: "It's much simpler and preferable for manufacturers to avoid this claiming-back process where they can, especially in this tough economic environment when cash flow is more important than it has ever been."
Other spirits that are produced in the same way include French Brandy, Amaretto, Calvados, Rum, Triple sec and Scotch Whisky. "For manufacturers that use alcoholic beverages in food processing, there is a growing interest in using VAT and duty free ingredients as a way of cutting costs," according to Johan Allert, md of Cuisinewine.
"And in such a way we are hoping to make Bakkavör substantial savings on its ingredients." Cuisinewine also supplies VAT and duty free wine ingredients to the food industry. But these are turned into condiments using a different process.
The company adds salt, 0.5% per litre, to the wines, which are also passed through a patented filtration technology, which reduces the ingredients to 5% alcohol by volume. The viscosity of the wine remains unchanged. Cuisinewine recently launched a port ingredient produced using this method and will soon be unveiling a VAT and duty free sherry ingredient.