Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What are the practical options for getting RTD canned cocktails into the French market given the combined alcohol duty and sugar tax?
France's combined alcohol duty (€0.23 per unit) and sugar tax (€1.31 per unit) effectively closed the RTD canned cocktail market almost overnight—it was a deliberate policy to target youth drinking. Retail viability is extremely difficult under current taxation, but members identified a few approaches others have attempted: - **Desperados** — the primary successful RTD retail brand in France; uses a tequila base, suggesting spirit-based positioning may help navigate the tax structure - **Féfé** — another visible RTD brand, though category presence remains minimal - **Reformulation to malt-based or sugar-free**: Members suggest swapping sugar for sweeteners (referenced as a tactic Britvic uses) or moving to a neutral malt base to reduce tax exposure. One member offered to help with reformulation and can share ingredient suppliers if needed - **Increase ABV**: One experienced producer noted "up the abv is the only way" - **Contact Aston Manor**: They have a parent company in France and produce high-sugar-content perry and cider-based cocktails; worth approaching for market-entry insights **Important caveat**: The market is heavily constrained. Members noted that RTD cocktails "barely exist" in France at present. The category has been largely replaced by flavoured beers (mango, raspberry, etc.), which sit in a different tax bracket. France remains "a nightmare for the category" overall.
Can a drinks producer qualify for Small Producers Relief on alcohol duty if their base alcohol is imported from a non-small producer?
The regulatory text suggests that imported base alcohol must also come from a qualifying small producer to access Small Producers Relief, which creates a challenge for RTD makers sourcing from large international suppliers. **Key findings from member experience:** - The official guidance (https://www.gov.uk/guidance/check-if-youre-eligible-for-small-producer-relief-on-alcohol-duty) appears to require the supplying producer to also be a small producer, which excludes most large US alcohol suppliers. - **HMRC's interpretation is unclear and inconsistent.** Members report that HMRC internally disagrees on what constitutes "alcohol production," suggesting the rules may be applied differently depending on who you speak to. - One member suggested a potential workaround: establishing a small UK SPV (special purpose vehicle) to purchase and re-supply the imported alcohol, creating a chain where the immediate supplier is a small UK entity. This is technically possible but members acknowledged it sits in ethically grey territory and its legitimacy is unverified. - No members confirmed successfully using this approach or obtained explicit HMRC clearance for it. **Recommendation:** Before committing to a restructuring, contact HMRC directly to confirm their current interpretation, as the scheme's definition of "production" appears to be under internal debate. Members suggest being cautious of workarounds without explicit written approval.
Do you need to be VAT registered to sell alcohol if your turnover is under the £90k threshold?
No, you do not need to be VAT registered to sell alcohol below the £90k threshold. Members clarified that **AWRS (Alcohol Wholesaler Registration Scheme) registration is separate and can be obtained without VAT registration**. However, a key consideration: if you estimate your sales will exceed £90k in the rolling 12 months ahead, you should register for VAT voluntarily *before* hitting that threshold, rather than waiting. You can also choose to be VAT registered even if you're under £90k if it suits your business. One member noted this would be "backwards" if VAT registration were mandatory for alcohol sales below the threshold, suggesting the regulatory intent is clear on this point.
What is the correct HMRC tax code for spirits over 22% alcohol?
The tax code for spirits over 22% alcohol has changed. **Code 345** is now the correct code to use when submitting W5 forms to HMRC. This replaced the previous code 451. If you're experiencing issues submitting with the new code, check you're referencing the current version of the HMRC guidance, as some members found they were initially reading outdated information.