Wine giant E&J Gallo plans to cut up to 50 jobs in the UK, blaming the move on tax rises and a tough economic climate.

A spokesperson for the California wine giant told just-drinks today (23 January) that the group has opened a 30-day consultation with employees in the UK.

While she emphasised that "no decision has yet been made", she conceded that job cuts, possibly up to 50, were likely. "Largely driving this action is the 17% increase in duty tax last year," she said.

Gallo's move will add to a growing sense of anxiety in the UK wine sector.

Gallo rival Constellation Europe told just-drinks before Christmas that it, too, would have to cut around 50 jobs in the UK. It blamed the tax rise, which was applied by ministers to all alcoholic drinks last year, and also a slowdown on the country's wine market.

The Gallo spokesperson said today that volume sales in the wine sector were decreasing, but that "Gallo sales over Christmas were very strong".

Fears are growing in the industry, however.

Industry sources have told just-drinks in recent weeks that more job cuts are likely in the UK as the wine sector struggles to absorb extra costs amid one of the worst economic downturns for decades.

Gallo said in a statement that it is considering "new business models" in the UK and Europe, but added that "we remain committed to the UK and European markets in which we have long-standing relationships with customers and consumers".