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Spirit revenues top beer for the first time

Published:  05 June, 2017

Sales of spirits brought more money to the Treasury than beer for the first time ever, according to the latest HMRC figures released this morning.

The Treasury earned an extra £225 million in revenue from spirit drinkers thanks to the freeze in spirits duty in the 2016 Budget, taking its total spirits duty to over £3.38 billion.

Beer duty, which was also frozen, contribution £3.32 billion, with wine remaining at the top of the table cashing in over £4 billion for revenue coffers this financial year.

The gin boom, sales surged 12% making it the fastest growth rate of any spirit drink (WSTA Market Report), played a key part in spirits overtaking beer in the historic industry first.

The windfall enjoyed by the Treasury proved the point that cutting or freezing spirit duty brought rewards, said Miles Beale, WSTA chief executive, as he raised concern that the growth in spirit sales and duty revenue could falter on the back of spirit makers being slapped with a 3.9% rise in alcohol duty in the March Budget, adding another 30p to a bottle.

“The 7% increase on revenue takings came as a result of the Chancellor freezing spirit duty in 2016 and allowing the industry to grow and invest - the inflation busting rise in duty this year was such a disappointment and threatens the industry’s ability to invest, grow and export,” said Miles.

The UK has the fourth highest spirits duty rates in the EU with 77% of a bottle of spirits accounted for by tax, with £10.33 going straight to the Chancellor’s purse for every average priced 70cl bottle of 40% abv spirit bought.