HMRC wine over nettle beer

HM Revenue & Customs (HMRC) has driven a Cornish drinks producer to lower the alcoholic strength of its ‘nettle beer’ and stung it with a stiff duty bill, after it decided that the drink should be classified as a wine.

Officials for Her Majesty’s Revenue & Customs (HMRC) told Helston-based Foodswild that Cornish Stingers is a ‘made wine’ rather than a beer under EU regulations, and should attract a much higher rate of duty accordingly: the firm has now been stung with a retrospective duty bill of almost £10,000.

Sting in the tail

Owner of the self-styled 'wild food business' Miles Lavers told FoodManufacture.co.uk: “It’s been a bit depressing. They impounded 2,000 bottles at the end of November and they stopped me brewing in December.

“We’ve been making Stingers for a few years now and this is the first year we’ve frozen nettles so we can carry on through the winter. We’d bought huge new freezers for the purpose.”

HMRC ordered Lavers to stop selling the drink until he resolved the denomination issue, and advised him to reclassify Cornish Stingers as a beer by adding malt.

Instead Lavers instead opted to reduce the drink’s strength from 4.5% to just under 4%, thus bringing it inside a different made wine tax bracket and retaining the beer classification.

Definition no small beer

However, Lavers has appealed against the HMRC's decision, arguing that UK/EU beer definitions vary, and that Cornish Stingers falls within the terms of the Alcoholic Liquor Duties Act 1970.

Beer is defined here as "ale, porter, stout and any other description of beer, and any liquor which is made or sold as a description of beer or as a subsitute for beer, whose alcholic strength exceeds 0.5%".

Foodswild sold almost 40,000 bottles last year, said Lavers, and was on course to turnover £150,000 before its Cornish Stingers stock was impounded.

He estimated that the resulting trade disruption will cost the firm around £20,000 in addition to the retrospective duty payment, which he may still contest.

Nonetheless, Foodswild still plans to up production this year by outsourcing it to the Wooden Hand Brewery in Truro, where it can process up to 10,000 bottles a week.