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

WSTA challenges "misleading" government projections on wine consumption

Published:  22 November, 2016

The government is relying on misleading projections for wine consumption to make decisions on alcohol duty, the Wine and Spirit Trade Association has claimed.

With the Chancellor's Autumn Statement due tomorrow, the WSTA is calling on the Office of Budget Responsibility, which compiled the data on which decisions are based, to revise its forecasts.

The OBR predicts that wine consumption in the UK will grow by 16% over the next five years.

This is at odds with the fact that combined sales of still and sparkling wine have declined by around 2% over the past 10 years, the WSTA contends.

Miles Beale, chief executive of the WSTA, said: "The OBR's projections simply do not reflect the reality that wine businesses across the UK are facing. The industry has faced tough trading conditions for over a decade.

"Ministers should be getting as accurate as possible information about the impact duty rises may have on UK wine businesses and their 30 million wine consumers, but we don't feel that this is the case with the existing forecasts.

"Given they will directly inform ministers' decisions on duty changes, we are urging the Office of Budget Responsibility to take the time to review the wine consumption forecasts as part of the Autumn Statement and understand the pressure that the industry is facing at this time."

The government recently confirmed that the OBR's projections do not take into account the impact of the Brexit vote on prices.

The UK currently imports some 1.8 billion bottles of wine each year, at a cost of around £3 billion. The Brexit vote has driven down the value of sterling, adding approximately15% - or £413 million - to those import costs, equivalent to around 29p per bottle if the cost were passed on to the consumer.

Duty on wine in the UK has risen by over 50% since 2007, and was the only category of alcohol to receive a duty rise in the 2016 Budget.

At its current level, wine duty adds £2.08 to the cost of a 75cl bottle of wine, and £2.67 to a bottle of sparkling wine.