Wine group prunes 50

CONSTELLATION Brands – the US owner of Australian wine labels Hardys, Leasingham and Banrock Station – has reportedly sacked 50 British-based employees in response to an 8 per cent rise in wine taxes.

Constellation controls British drinks distributor Matthew Clark, which sells 25 million cases of wines such as Hardys, and New Zealand's Nobilo, to Britons each year.

Constellation Europe president Troy Christensen told London-based Times Online that two duty rises this year had cost the company $122 million, and it would look at more job cuts and lower promotional spending.

"We are a global company and we tend to put investment in countries that produce the best returns," he said. "At the moment, there are better opportunities elsewhere in Europe."

The British Government raised duty on alcohol, tobacco and petrol by 8 per cent on December 1 to offset a cut in VAT (equivalent to Australia's GST). The VAT has been cut from 17.5 per cent to 15 per cent for 13 months in a bid to spark the economy.