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WSTA urges duty cut on wine and spirits

Published:  10 November, 2009

The WSTA is urging the government to cut duty on wine and spirits when VAT is restored to its standard 17.5% at the end of December.

A temporary VAT reduction was introduced in November 2008 because the Treasury wanted to ensure the impact was cost-neutral for alcohol due to the eight per cent duty on wine and the four per cent in spirits earlier in the year.

The WSTA argued that the tax increase was not cost neutral for over 90% of the wines sold in the UK off-trade.

It says coming on top of the excessive duty increase in the March 2008 Budget, the tax rise exacerbated the impact on the industry of reduced consumer spending, the adverse exchange rate and increased cost of production.

In a letter to Treasury Exchequer Secretary Sarah McCarthy-Fry MP, the WSTA warns that duty rises of 19% for wine and 15% for spirits since March 2008 have contributed to job losses and cutbacks in investment.

Jeremy Beadles, chief executive of the WSTA, said: "While other industries have had a helping hand during this recession the drinks industry has been hit by successive tax increases.

"With VAT rising again the reason for last November's tax hikes on alcohol has gone and Ministers should act to ensure a fair deal for the industry and the consumers we serve."