Spain’s wine industry is sounding the alarm as exports to the UK, its main market for still wine, continue to decline in value due to new British import tariffs that penalize higher alcohol content.
Since February 2025, the UK has implemented a regulation shifting wine duties from a volume-based system to one that taxes based on alcohol strength, a change that disproportionately impacts Spanish red wines, which naturally tend to carry higher ABV (alcohol by volume) due to Spain’s warmer climate.
Tariffs Reshape the Competitive Landscape
The switch in UK policy means importers must now pay more for wines with alcohol content above 12.5%, with the sharpest tax increases targeting full-bodied reds — a hallmark of Spanish viticulture. This puts Spanish wines at a disadvantage compared to those from cooler-climate producers like France and Italy, whose wines more often stay below this threshold.
José Luis Benítez, director of the Spanish Wine Federation, described Spanish red wines as being “most penalised by the tax increase,” noting that the regulation favours lower-alcohol beverages like beer and sparkling wines, further distorting the competitive field.
Export Figures Show Spain Losing Ground in the UK
According to the Spanish Wine Interprofessional Organisation, Spanish wine exports to the UK fell by 7.5% in value during the first four months of 2025, dropping to EUR 111 million (USD 127.32 million). This decline outpaces the drop in UK-bound exports from France (-6%) and Italy (-6.7%), highlighting the disproportionate impact on Spain.
By contrast, Spain’s wine exports to the United States grew 9%, reaching EUR 119.6 million, as producers and importers seek to diversify markets in anticipation of potential U.S. tariffs.
Price Pressure and Consumer Dissonance
Winemakers and exporters point out that price hikes linked to the alcohol-based tariff system are straining relationships with British importers. Nicola Thornton, founder of wine export company Spanish Palate, noted, “It’s putting our prices much, much higher. Everyone is asking: what’s the alcohol level?”
Reports indicate British buyers are now paying around 20% more for Spanish red wines with higher ABV. The pressure is prompting some importers to seek lighter wines between 11.5% and 12%, yet this presents a new challenge: consumer preference.
“People like wines that have a certain body,” explained Richi Arambarri, CEO of Rioja-based Vintae Winery. “And for that, the alcohol content is essential.” While trimming alcohol levels might help on paper, the reduction in body, flavor, and complexity may lead to consumer dissatisfaction — especially for loyal red wine drinkers.
Wider Implications for Spanish Wine and Trade
For Spanish producers, the UK’s move is a double blow: not only are they coping with higher post-Brexit export costs, but the tariff structure now penalizes the very characteristics — richness, ripeness, and body — that make their wines appealing. The result is a loss of competitiveness, diminished profitability, and a need to rethink strategies for both product and market diversification.
As climate change continues to influence grape ripeness and alcohol levels, regulatory responses like this one could have far-reaching consequences, not only for Spanish producers but for wine industries in other warm-climate regions as well.
In the meantime, the Spanish wine sector is urging dialogue, calling for more equitable treatment and flexible tariff structures that consider both tradition and evolving market dynamics.
Source: Reuters