Lords consideration of the Wine (Amendment) (England) Regulations 2024 - Jan 16

Moved by

Lord Harlech

That the Grand Committee do consider the Wine (Amendment) (England) Regulations 2024.
Relevant document: 7th Report from the Secondary Legislation Scrutiny Committee

Lord Harlech (Con)

My Lords, I declare my farming and land management interests as set out in the register. These regulations were laid before this House on 4 December 2023.

The Government are making this legislation to fulfil obligations on the marketing of wine in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—the CPTPP. This follows the UK signing the protocol of accession last year. This instrument will introduce rules that govern how products marketed as ice wine must be produced and marketed.

Ice wine is a type of dessert wine produced from grapes that have been frozen while still on the vine. Annual global production of ice wine is very small but can yield high-quality wines that sell at premium prices. It is therefore important to make sure that ice wine is marketed correctly to support consumers in their choices. Ice wine is currently not produced domestically but it is imported. The instrument inserts a restriction in Regulation 2019/33 for ice wine where the product can be marketed as ice wine or under similar terms only if the wine is made exclusively from grapes naturally frozen on the vine.

The instrument being debated today applies this restriction in England. For continuity, separate instruments applying to Scotland and Wales are also being made. This type of imported wine will continue to be able to move from Great Britain to Northern Ireland via the Northern Ireland retail movement scheme under the Windsor Framework.

This instrument will also update the list of oenological practices, processes and restrictions that may be used in the production and conservation of wine and other wine products. The changes are intended to improve the quality of wine and are highly technical in nature. For example, they include discontinuous high-pressure processes, which reduce yeast contamination in wine; they therefore reduce reliance on sulphites to preserve the wine and help improve its fermentation.

These changes align with those adopted by the International Organisation of Vine and Wine—the OIV—since 2019 and approved by the UK through our membership of that organisation. The Scottish Government have adopted the same changes and the Welsh Government are in the process of doing so. This will ensure that producers across Great Britain will benefit from the latest technological developments and winemaking practices. Broadly similar provisions already apply in Northern Ireland. This instrument was notified to the World Trade Organization’s Committee on Technical Barriers to Trade and no comments were received.

In summary, this instrument makes technical but necessary changes to the legislation. It will enable the UK to comply with CPTPP commitments and ensure that British wine-makers can use the most up-to-date winemaking techniques. I beg to move.

Baroness Walmsley (LD)

My Lords, noble Lords have many impressive attributes, but being in two places at once in person is not one of them. So, because my noble friend Lady Bakewell of Hardington Mandeville is moving an amendment in the Chamber, the Committee will have to put up with me.

I thank the Minister for his introduction to this statutory instrument. This is the second instrument on the provisions around wine in a short period of time. Is it a trend? Apparently, the Secondary Legislation Scrutiny Committee has had something to say about the SIs in both cases and has drawn them to the attention of the House.

These regulations prohibit the labelling and marketing of wine as ice wine unless the grapes used have been frozen on the vine as opposed to being subject to freezing afterwards. I had always thought that genuine ice wine was exactly that: wine made with grapes frozen naturally on the vine, concentrating the sugar and making the wine both delicious and very expensive.

I understand that these regulations are necessary to fulfil the obligations in the CPTPP, which was signed by the Government in July last year and debated in the Chamber earlier this afternoon. I also understand that Canada is a major producer of ice wine.

This SI applies to wine for the English market only. The Minister mentioned that Scotland and Wales are progressing their own SIs, which will fit in with this one. Can he say when it is likely that those SIs will be in place? There is likely to be considerable confusion if this is not done quickly, as a bottle of wine is easily transported across borders; confusion could result.

There are also likely to be issues around the labelling of ice wine in Northern Ireland, which is subject to the regulations that exist in Europe and not those that will pertain under the CPTPP. Perhaps the Minister can say something about that.

As a member of the International Organisation of Vine and Wine since 2019, the UK now has to abide by the regulations adopted by that organisation, which, according to the Explanatory Memorandum, change on a fairly regular basis. This SI is temporary and likely to change again in 2025 when it will be revoked. Can the Minister provide any clarification on whether Scotland, Wales and Northern Ireland will at that stage have the same regulations as England—or will all four nations be operating under separate arrangements on ice wine? The SLSC raised the issue of confusion around different rules on ice wine being applied across the devolved nations, including for methods of production.

The Explanatory Memorandum, at paragraph 11.1, indicates that the Government

“will put the necessary guidance regarding measures contained in the instrument on GOV.UK”

once Parliament has approved it. Is it therefore safe to assume that this instrument will be presented to the Chamber tomorrow for approval and that the guidance will appear on the website later tomorrow afternoon? Given the likelihood of confusion, I would like the Minister’s reassurance on this matter.

The Wine and Spirit Trade Association is concerned about the excise duty system and the need to make permanent the temporary easement mechanism. This is the single most important issue for the UK wine sector. The temporary easement taxes all wines in the 11.5% to 14.5% ABV range at a single rate of the mean, I suppose: 12.5%. This is due to end on 1 February 2025. If this is not made permanent, UK businesses will encounter increased bureaucracy and administrative burdens, and therefore increased costs, so will the Minister speak to his colleagues in the Treasury to make this easement permanent and thus support our flourishing wine industry?

This is a fairly straightforward SI which is linked to the CPTPP, and presumably ice wine will begin to appear on our supermarket shelves correctly labelled in the fairly near future, but I do not think I will be able to afford it.

Lord Moynihan (Con)

My Lords, it is very difficult to follow the noble Baroness after such an erudite speech, but I have a few quick questions to put to my noble friend. As I see it, this statutory instrument is being introduced only because we need to meet the requirements and obligations on the marketing of wine in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. There is nothing intrinsically necessary in the labelling of ice wine that would otherwise have required legislation.

I therefore turn to why we are doing this and why it was originally agreed. I am sure the Minister has had many a glass of fine ice wine, not least from Canada or Germany. The definition of ice wine is that the grapes are left on the vine, as my noble friend said, until the temperature drops to a specific level, which I think is between minus 8 degrees and minus 14 degrees Celsius, which allows the grapes to freeze naturally. Then, when the pressing takes place, they are quickly harvested and pressed while still frozen, the frozen water content remains in the form of ice crystals and only the concentrated sugary juice is extracted. If, by chance, the frost passes quite quickly and the pickers go to the same vineyard and take the grapes from the same vine during the day, when it is marginally above freezing, can that still be called ice wine?

Secondly, and related to that, the alternative method of making ice wine from grapes follows after the harvest: the grapes are harvested and then artificially frozen to a temperature similar to that used in the natural freezing on the vine method. Frozen grapes are pressed much the same and the concentrated juice is collected, similar to the process with the grapes frozen on the vine. They do not need to go through the technical stages that my noble friend has outlined; it could be exactly the same process. As I understand it, there is therefore a distinction to be made between ice wine that is made from grapes frozen after harvest and grapes frozen on the vine, although I challenge the Minister to tell me the difference, if he were given a blind tasting, between the two.

So the Minister comes forward with an excellent SI that says we cannot have anything that is

“a term similar to a term mentioned”

as ice wine. I would be interested to know what a similar term to ice wine might be. We always want to get the legislation exact. I imagine that a lengthy court case might ensue as a result of asking: what is “a term similar to” ice wine? Could it be called “frosty wine”, for example? Would that be “a term similar to” ice wine? I know that the noble Baroness, Lady Hayman, has the opportunity to speak on behalf of the Opposition, but I give the very fine officials who are sitting behind the Minister the opportunity to answer those two questions. It would be very helpful to me and, I am sure, to the Committee to know those answers.
Baroness Hayman of Ullock (Lab)

I thank the noble Lord for introducing this statutory instrument. I will not go into the details of what it is about; he explained it very well, as has the noble Baroness, Lady Walmsley, but I have a few points and questions.

As we have heard, the SI is largely to give effect to the relevant part of the CPTPP because Canada is the major producer of ice wine. I have been to a number of vineyards in Canada that produce ice wine. In fact, I did splash out, buy some and bring it back. If you have not tried ice wine, it comes in lovely slim bottles and is very nice indeed. In response to the noble Lord, Lord Moynihan, my recollection—I could be wrong—from the tours of the vineyards is that it has to be harvested when it is frozen; you cannot defrost the grapes, then pick them. It is important that we are protecting what is a very distinctive product, so we clearly support this SI.

While we are on the issue of the CPTPP, are there going to be any other SIs coming through Defra regarding trade and the CPTPP? I do not know if the Minister knows the answer but it would be quite interesting to have a heads-up on that. We have had, as the noble Baroness said, other SIs on wine. There may not be any other way around this, and it is no criticism, but Defra seems to come up with a lot of small SIs. Does it have to be like that? Could we do them en bloc to be a bit more efficient?

I was interested that in the Minister’s introduction he talked about the fact that this product is only imported; we clearly do not make ice wine in this country. It would be interesting to know the impact of this SI. How much ice wine is imported into this country? I had never seen it until I went to Canada. What percentage would no longer be able to be marketed and what is the actual impact of this statutory instrument? It would be interesting to know if it has been a problem for the wine trade.

The Minister also mentioned the Welsh and Scottish instruments that are likely to come forward through their legislation. Other noble Lords also mentioned this and the noble Baroness, Lady Walmsley, asked about the timescales. I note that Defra’s response to the Secondary Legislation Scrutiny Committee’s concerns, in its report, explained that there are already rules in place which mean that this should not be a problem. Even so, we need to get all our legislative ducks in a row, so it would be interesting to know the likely timescales.

Finally, I support what the noble Baroness said about the Wine and Spirit Trade Association’s concerns regarding tax and excise duty. It has raised a really important point and I support her request to the Minister that this is discussed with the Treasury and that the department looks at this seriously.

Lord Harlech (Con)

My Lords, I am very grateful to all noble Lords who have contributed to this brief, but very illuminating, debate on ice wine and the further measures in this statutory instrument. There has been consensus on the importance of these changes. Although ice wine is not produced domestically, but imported, it is really important that consumers are able to identify products easily.

The change will assure consumers that only wine that is made from grapes naturally frozen on the vine is sold as ice wine. Taking up my noble friend’s point, and as other noble Lords have mentioned, the change is also necessary for compliance with the UK’s CPTPP agreement. What good timing that today’s SI debate is on the same day as that Bill’s Report. Similarly, introducing the most recent winemaking techniques—let us not forget the second part of the SI, because it is really important for what is a growing industry—will enable English wine producers to use the latest technological advancements and winemaking practices.

6.30pm

I turn now to some of the specific questions raised. The noble Baroness, Lady Walmsley, talked about Northern Ireland in relation to the CPTPP. The accession protocol of the UK to the CPTPP contains a provision that provides for the relationship between the Windsor Framework and the CPTPP. It ensures that nothing in the CPTPP will prevent the UK fulfilling its obligations under the Windsor Framework, which protects Northern Ireland’s integral place in the union. The United Kingdom as a whole will accede to the CPTPP and every nation and region of the UK is expected to benefit from the agreement with members with a combined GDP worth around 12% of global GDP in 2022. Accession could enhance the already strong trade links between Northern Ireland and CPTPP members. Northern Ireland goods exports alone were worth £0.9 billion in 2022, or 3.5% of total UK exports to CPTPP countries.

I move on to the other devolved Administrations and the important issue of timing in Wales and Scotland that was raised. My understanding—I will go back and correct the record if this is wrong—is that the SI was passed in Scotland today, and in Wales, it is scheduled for business in the Senedd on 23 January. All three SIs are due to come into effect in each country on the same day, 15 July 2024, so we anticipate no divergence in GB.

In response to the noble Baroness, Lady Walmsley, on the issue of making the wine duty easement permanent, the Government understand that there will be some administrative changes for businesses in adapting to the new wine duty structure. We have listened to industry to ensure that these are not unnecessarily burdensome. There is a transitional measure for 18 months from August 2023, which will mean that all wine between 11.5% and 14.5% ABV will pay duty as if it were 12.5% ABV. This is a generous concession to support the wine industry in moving to the new system.

Noble Lords asked about guidance on ice wine. As I understand it, the advice will be on GOV.UK after it is announced in the Chamber but before the SI comes into force. It will not be on GOV.UK tomorrow afternoon, but it will be there for everyone to see, importers and consumers, in advance of that July date. I hope that is satisfactory to noble Lords.

The definition of ice wine is that the grapes must be frozen when they are picked. I have yet to try it but, having debated this SI, it is definitely—
Baroness Hayman of Ullock (Lab)

I shall bring a bottle in.

Lord Harlech (Con)

Now that is on the record.

I say again that we have a thriving domestic wine production industry, which is continuing to grow at speed. WineGB, which represents most domestic wine producers, reported that 2023 saw Great Britain’s largest ever grape harvest, which it is estimated will produce 20 million to 22 million bottles of British wine. There was overwhelming support for updating these oenological practices from both our domestic producers and international trading partners, all understanding the importance of having access to the latest methodologies.

Finally, on the reforms on wine not being all done in one SI, the department has been working at pace to drive forward wine reforms from retained EU law and implementing the reforms in three phases, the first of which came into force on 1 January this year to dovetail with the end of an easement relating to importer labelling. The second instalment, in this SI, is due to come in in July in time to ratify the CPTPP agreement and now we can focus on the final phase. I think the logic behind that is that it is better to keep things moving rather than doing things in one block, which could have caused uncertainty to producers and importers.
Lord Moynihan (Con)

Before my noble friend sits down, I would like to press him on why, under new paragraph 8(d) in Regulation 2, it is deemed necessary by the Government to write

“a term similar to a term mentioned in point (a), (b) or (c)”

when those three sub-paragraphs are

“(a)‘ice wine’; (b)‘icewine’; (c)‘ice-wine’”.

It would be helpful to the Committee to give an example of a term that is similar to ice wine that would be covered by this statutory instrument.

Lord Harlech (Con)

For the benefit of the Committee, it may be useful for me to go away and consider my noble friend’s question, so as not to detain the Committee any longer. I will of course go back and look at Hansard and if there is anything that I have not answered then I will write, circulate that to all noble Lords and place a copy in the Library. I hope that I have addressed the majority of issues raised and that noble Lords will approve this instrument.

Motion agreed.