Thread by @Jim_Cornelius

1/9

In the House of Commons today Michael Gove was talking about some 0% duties replacing current duties in a no-deal Brexit

He said (among other things which I'll deal with elsewhere) that there will be a 7% reduction in the cost of wine from Argentina.

Let's check, shall we?

2/

Here we go:

The tariff on bottled red wine containing less than 13% alcohol (CN 2204219811) from Argentina is shown here

The tariff within quota it is €10 per 100 litres.

Above quota it is €13.10 per 100 litres.

trade-tariff.service.gov.uk/commodities/22…

3/

However, wine shipped intercontinentally normally arrives on our shores in a big plastic bubble inside a container like this which is much cheaper to transport.

So in the tariff schedule, it's under a different code; CN 2204299811.

globalfreightforwarders.com.au/commercial-fre…

4/

Here's the entry red wine from Argentina with less than 13% alcohol supplied in containers over 10 liters (CN 2204299811)

The tariff within quota it is €8 per 100 litres.

Above quota, it is €9.90 per 100 litres.

trade-tariff.service.gov.uk/commodities/22…

5/

Let's just use this highest figure of €13.10 per 100 litres.

What's that per bottle (750ml)?

300 litres is 400 bottles. So If we multiply by 3 we get €39.30 per 300 litres

Converting to pounds €39.30 = £35.23.

£35.23/400 gives us a tariff of £0.088075 per bottle

~8.8p

6/

If taking that off Michael Gove's Argentinian wine saves 7% then his bottle of wine costs:

8.8p/7*100 = £1.25 per bottle.

£1.25 a fricking bottle.

What sort of pissy Argentian wine is Michael Gove drinking?

7/

Of course, I'm missing something and that something is UK excise duty which is a UK duty on alcohol and goes into the UK's tax coffers.

That's also shown on the schedule and it's £2.9757 per litre. That's over 33 times as much as the EU tariff.

8/

That UK duty equates to £2.23 per bottle and it went up by 7p from £2.16 per bottle in February of this year.

Thank you @GavinQuinney for the table.

9/9

Anyway in case you haven't realised it by now Gove's claim about a 7% saving on wine is a load of old cobblers.

Being generous we might suppose that he or someone at some point misread 7p, which is roughly the saving on the duty for the bulk transported wine as 7%.

/END

Honey. Read to the end.

https://twitter.com/Jim_Cornelius/status/1181561008604798977?s=20

For completeness I should mention that there's 20% VAT on wine too. Now some people think that this is an EU tax. So let's clarify a couple of points.

Firstly almost all countries now use VAT/GST. In or out of the EU we would have had it, as promised in the 1970 Tory manifesto.

It replaced purchase tax.

And just to be clear on that here's when the Scandanavians adopted VAT, none of them in the EEC at the time and only Norway planning to join. Now almost every country uses it.

Denmark: 1967
Sweden: 1969
Norway: 1970

oecd.org/ctp/consumptio…

After we joined the EEC a number of EC VAT directives were adopted with a view to harmonisation.

Member states must set it at a minimum of 15% for the base rate and can have 2 or 3 reduced rates including 0% and a special zero-rate for the UK.

ec.europa.eu/taxation_custo…

Now some people, including a bloke who rang up @mrjamesob and LBC think that this means that 15% goes to the EU. It doesn't. Some of it does, but it's based on a system whereby around 0.3% of the base rate forms part of the budgetary contribution.

publications.parliament.uk/pa/ld201617/ld…

So in 2016-17 £138bn was collected in VAT and of that around £3bn (0.21%) formed part of the £8.9bn (the infamous £350m per week more like £170m per week) that was sent to the EU.

So if a bottle of wine is £12 inc VAT about 3p is the EU's VAT cut.

All countries apply tariffs to imports. We did before we joined the EEC. The CU eliminates them between members leaving only external tariffs.

This comparison of G7 avg tariffs was published in the WSJ the other week.

Look how Trump has piled them on.

I meant to talk about grapes too but I got distracted.

So I've done a brief update here:

TL;DR I haven't worked out the percentages yet but any claim about Brazilian grapes ia a total red-herring because of Chile!

More detail on this a bit later.

https://twitter.com/Jim_Cornelius/status/1181983206536552448?s=20

Oh, and I might as well mention that because of the EU FTA with Chile all the stuff about Argentinian wine does not apply to Chile. It's tariff-free.

I think I'm done now.

I can't help myself.

The UK exports more wine (by value) than Argentina. trademap.org/Country_SelPro…