WSTA calls on government to ‘stop punishing consumers’ as wine prices continue to rise

By Lisa Riley

Published: 12 September, 2017

The Wine & Spirit Trade Association (WSTA) has called on the government to “stop punishing consumers” as its latest market report, released today, revealed the impact of the triple whammy price hike.

Published on the day of the WSTA annual conference, the report said the average priced bottle of wine, sold in shops following the March Budget, had hit £5.58 – a 4% increase on last year.

In pubs, bars and restaurants, an average priced 175ml glass of wine had increased 21p compared to the same period last year, according to the report, which takes into account sales between 26th March to 17th to June 2017, capturing alcohol sales for the three months following the Budget and showing the trading landscape almost a year on from the vote to leave the EU.

The report showed that consumers were “well and truly” feeling the effects of the triple whammy, said WSTA, referring to the inflationary 3.9% duty rise on alcohol inflicted in the March Budget; the effects of Brexit and the fall in the value of the pound, compounded by rising inflation.

With the Autumn Budget poised to see alcohol duty rise by inflation once again, chief executive, Miles Beale, said he was “sad to say the pain doesn’t end here”.

“Unless Government starts showing support for our under-valued alcohol industry, in November we’ll find ourselves on the end of a further blow to follow up the triple whammy combination already dealt out to our industry this year,” he said.

We need a time out from excise duty increases, he added.

At the last Budget the Chancellor announced “no change” to alcohol taxation policy - meaning alcohol duty would increase, year-on-year, in line with RPI inflation for the duration of this parliament.

If this position holds in the Autumn Budget, wine duty will go up by another 8p a bottle, spirits 29p and beer by 2p a pint.

“Following the EU Referendum in 2016, the UK wine industry has done its best to absorb rising import costs, but as predicted it was only a matter of time before any cushioning against the effects of a weaker pound ran out and costs were passed on to the consumer,” said Beale.

Currently 56% of the cost of the average bottle of wine is taken up in tax, including £2.16 tax and 92p VAT, according to WSTA, with duty rates even higher on products like English Sparkling wine at £2.77 a bottle.

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