The Chancellor's 11% inflation-busting tax hike on March 12th (14 pence on the price of a bottle of wine, and 18 pence on a bottle of sparkling wine) means for the first time people in Britain now pay more tax on wine than in any other European Union country.

On a £3.50 bottle of wine, tax (duty and VAT) now accounts for £2.07 or three-fifths of the price. Add the cost of transport, the bottle, cork, foil and label, as well as a tiny profit for the retailer and wine maker, and the value of the wine is typically as little as 45p. Small wonder that people are trading up to wines in the £5 to £10 bracket where duty, as a fixed cost, represents a smaller proportion of the bottle price.

Jeremy Beadles, Chief Executive of the Wines and Spirits Trade Association, commented:

"It is no cause for celebration that British consumers will now pay more tax on wine than anyone else in the European Union - including Finland, Ireland, Denmark and Sweden.

"It is bizarre at a time when the economy is slowing, prices are rising and many families are feeling the pinch that the Government should choose to add to their burden by making the simple pleasure of a glass of wine or spirits considerably more expensive.

"We are surprised that a Government which came to power promising to govern in the interests of the many now wishes to punish them. Our polling shows voters don't support this.

"Wine and spirit drinkers already face the prospect of price rises as a result of the increasing cost of raw materials - grapes, grain, packaging, glass, freight and energy. This tax hike will simply make things worse for the average consumer."

"That the Government should commit itself and future Governments to an above inflation rate increase for alcohol for the next four years is hitting all drinkers for the sins of a minority even before it has received the results of its own report on Pricing, Promotions and Harm. A policy of commit now, hurt consumers now, study the issue later."

 At H C Wines many of our prices have remained unchanged for four years as we have sought to buy better and on a bigger scale. But allied to adverse price movements as a result of the strengthening euro, increased transport charges and higher raw material costs, we feel we have little choice but to pass this duty increase - which affects us from Sunday 16 March - on to our customers. Nevertheless, we have increased prices only on just over half the range, and kept the increase to an average 1.9%.

 We thank you for your loyalty and believe that our wines still offer excellent value in today's competitive market.