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Wine and spirits bring £67m boost to Treasury coffers

Published:  14 June, 2018

The freeze on alcohol duty at last November’s Budget has given the Treasury a £67 million boost in just four months.

Collections on wine and spirits were up 2% from £3.224 billion to £3.291 billion from December to April compared to the same period the previous year, according to the latest HMRC figures.

With the wine and spirit duty collections continuing to increase to record levels, the Treasury is set to cash in on a projected £7.7 billion from wine and spirit revenue for the financial year 2017/18, up £140 million on the previous year, according to the WSTA.

The Treasury windfall follows a call by the WSTA for government to back the UK’s wine and spirit industry and help ease pressure on cash strapped consumers by freezing the UK’s excessive duty rates.

“We hope the latest windfall to Treasury coffers coming from the Budget freeze encourages the Chancellor to continue to stay in touch with what consumers want and support an industry which is proving to be a real asset to British business by rebalancing the UK’s excessive duty rates in this year’s Budget,” said WSTA chief executive Miles Beale.

The freeze in duty meant savings of 8p per bottle of wine, 11p on sparkling wine and 31p on an average priced bottle of spirits for consumers.

The HMRC data show that between December 2017 and April 2018, all alcohol duty collections – including wine, spirits, beer and cider - increased by 2% on the same period last year, bringing an additional £86 million to Treasury coffers.

Of this, £67 million came from wine and spirit sales alone, meaning that the wine and spirit industry accounted for 78% of the increase.

Wine collections have so far increased £33 million, up 2%, while spirit collections increased £34 million, also up 2%.

Wine remains top of the revenue collections table, totalling 37% of duty collections but accounting for only 18% of sales by volume.

It is only the second time in 15 years that wine duty has been frozen.