Subscriber login Close [x]
remember me
You are not logged in.

Rolling update: Key drinks figures tell MPs about the damage duty increases have on UK businesses

Published:  16 January, 2014

Leading figures from across the UK wine and spirits industry joined the trade lobby that took the Call Time On Duty campaign to MPs at the House of Commons last night.

Major companies including Diageo, Pernod Ricard, Treasury Wine Estates, Direct Wines, Laithwaite's, Copestick Murray, DGB, Enotria and Hillebrand were all present to push the industry's case to MPs from all sides of the House at a special parliamentary reception.

Simon McMurtrie, group chief executive of Direct  Wines, told it was vital the industry does all it can to make its case against what he saw as the damaging duty escalator.

He said that Direct Wines in 2013 paid up to £100m in tax, mostly in duty, on sales of £350m. "That is outrageous."  

"I am here to say that further duty increases will hold back the growth of our business," stressed McMurtrie.

He believed the fact the industry could now prove that by removing the duty escalator it would actually raise £230m in extra revenue for the Treasury and create 6,000 new jobs was a step change in its case against theTreasury. "It is good for growth and it is good for our industry," he added.

McMurtrie was also keen to press home the point that as an international business continued duty increases meant it was more likely it would invest overseas as the "incentive to invest in the UK goes away".

"The danger for the UK is that with the growth in wine in Asia and the US more producers will put more of their efforts in to those countries than in the UK."

Nick Hyde, chairman of Diageo and the Wine & Spirit Trade Association, that co-hosted the reception with the Scoth Whisky Association and TaxPayers Alliance, said: "I think the direction of the campaign is headed in the right direction.  The WSTA's Call Time on Duty now has a fact based argument that shows the economic impacts that duty has for the industry. 

"Seeing that 6,000 more jobs could be created is powerful evidence based argument.  It would be equally interesting to take a look at how many jobs have been cut if the duty escalator continues. Business will be forced to make cost cuts and a likely place would be with people."

Garreth Anderson of South African producer, DGB, was there to represent the interests of wine producers that are concerned about the high cost of doing business in the UK compared to the rest of the European Union because of the high duty rates.

He told it was important to come and make the case to MPs and just hoped there "ears were listening".

* NOTE: Wine and spirit producers concerned about the high duty rates in the UK can put their voice to the Call Time On Duty campaign by signing up to an open letter that has been put together by Harpers and the WSTA outlining to the Chancellor of the Exchequer how damaging the government's duty tax regime is on their business interests in the UK. Simply email your support to the WSTA and Harpers on and stating your name, your position, your company and what type of business you do int the UK.

A copy of the letter is attached.


Drinks industry takes its case to Westminster and urges MPs to Call Time On Duty

MPs from all parties came to talk to key figures of the wine and spirits industry last night at a special House of Commons event to publicise the Call Time On Duty campaign to try and get the Chancellor to freeze the alcohol duty escalator in the 2014 Budget.

Miles Beale, chief executive of the Wine & Spirit Trade Association, that is leading the campaign in partnership with the Scotch Whisky Association and TaxPayers Alliance, used the occasion to drum home the key arguments of the campaign. In particular he made clear to MPs that if the escalator was scrapped in this year's Budget it would create 6,000 new jobs and raise £230 extra revenue for the Treasury.

Conservative MP, Priti Patel, and chair of the All-Party Parliamentary Group for Small Shops, not only hosted the event but spoke out against her own party's Chancellor and the "punishing regime" he has been responsible for implementing on what is a "great British industry" with successive above inflation duty increases.

She said the drinks industry was "being held back" by the duty escalator and urged the Chancellor to back up the "benefits" he had brought to the beer sector by scrapping the beer duty escalator in the 2013 Budget.

Beale seized on Patel's comments to stress home the fact duty levels had increased by 50% on wine and 44% on spirits since it was introduced in 2008. It had gone up 25% overall under the current government.

In his speech Beale set out the "massive" economic contribution the UK drinks industry provides to the UK which included:

  • over £40 billion of economic activity in the UK, and

    • 1.8 billion bottles of wine sold in the UK in 2012
    • Scotch whisky makes up 25% of UK food and drink exports and English gin makes up 20% of the world's exports.

  • the sector employs around 475,000 jobs andsupports nearly two million jobs.
  • the drinks industry paid £14.5 billion in tax in 2012.

He set out to MPs why the drinks industry thinks this is "a punitive tax bill" and that the duty escalator is effectively a "super tax on jobs, on growth, on the great British pub, on SMEs and on the hard-pressed consumer".

He added: "This means that a sector of the British economy of which we should all be proud is fighting to contribute with one hand tied behind its back. It is being unfairly punished. The alcohol duty escalator is bad for the economy, bad for business and bad for consumers."

Beale stressed to MPs that "we're not asking for a favour or for money" but that if escalator was removed it "would represent a net gain, not cost". 

"Our message to the Chancellor is clear: if you're serious about creating jobs, supporting growth and cutting taxes, then you need to be fair and call time on your inflation-busting super tax now. Scrap it, do something good for the consumer, for the economy, for business, especially SMEs, and be the toast of all three," said Beale.