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Published:  23 July, 2008

By Jack Hibberd

Two of Britain's leading alcohol trade associations - The Wine and Spirit Association (WSA) and the British Beer and Pub Association (BBPA) - have reopened last year's spat over wine duty. The two associations sent in contrasting budget submissions in 2005. The BBPA repeated its call of last year for an equitable tax' on alcohol - meaning wine duty would be directly linked to alcoholic strength - while the WSA has released the results of a study that claims to show that, by contrast, wine is actually over-taxed compared to beer. Currently, all wine between 5% ABV and 15% ABV is taxed at the same rate, whereas beer is taxed in relation to its strength. The BBPA's position is that the current tax laws - introduced after the European Court of Justice ruled in 1983 that EU states should tax EU-produced beer and wine at the same rate - do not take into account the rising average strength of wines in the past decade. According to Mark Hastings, director of communications at the BBPA, when a wine reaches 13% alcohol, the taxable rate (relative to alcohol content) is less than that for beer, and that the vast majority of mass-market brands from the New World have alcoholic strengths at this level'. The WSA's Wine Strength Project, which used the Sainsbury's range as its basis (with sales data used to produce weighted average strengths), found that the average alcohol content was 12.5% ABV, with the figures for EU-produced wine at 11.79% ABV. Quentin Rappoport, director of the WSA, said: The average strength for non-EU wine is above 13% [13.1%], but what the BBPA has not taken into account is that non-EU wines pay CCT [the external EU tariff] in addition to duty. When you take this into account, wine is actually taxed heavier.' The WSA study states that this means wine duty would have to fall by 7% to bring wine and beer into a rough parity. Hastings said: We are in broad agreement with the WSA on duty issues, and that all alcohol in the UK is subject to far too much tax, but you either have an equitable tax system or you don't. We are just asking for wine to be taxed on the same basis as beer - alcoholic strength.' The WSA used its budget submission to call for a freeze or reduction on still wine duty and the abolition of the 42p surcharge for sparkling wine. It also repeated its claim that duty increases do not reduce alcohol misuse. Education and effective self-regulation, not higher taxes, are the way to change our drinking culture,' said Rappoport.