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WSTA reiterates ‘duty rise’ and ‘no deal' Brexit concerns to government

Published:  20 December, 2018

The Wine and Spirit Trade Association (WSTA) this week reiterated the “bleak picture” a ‘no deal Brexit’, combined with the pending duty rise, would paint for UK wine importers.

On the back of the October Budget, which saw the government deal a blow to the wine industry with the decision to let wine duty rise with inflation while freezing duty on spirits, beer and cider, the WSTA met with Treasury Minister Robert Jenrick to voice industry concerns over duty hikes and Brexit fears.

Warning Jenrick of the “potentially disastrous” consequences of a ‘no deal’ Brexit, on top of the duty rise for UK wine importers, Miles Beale, chief executive, WSTA, said:

“I met Robert Jenrick and told him that the government’s decision actively to single out wine for an increase at October’s Budget was a bitter blow to UK wine importers, who have already been hit hard by the devaluation of the pound.

“The UK wine industry has grave concerns over unfair duty rises, made worse by the prospect of a ‘no deal Brexit’.”

The Chancellor was able to deliver some good news for spirit makers at the Budget when he froze duty however, wine was singled out for a 3.1% RPI increase.

With the duty increase kicking in on 1 February this will lead to consumers seeing wine prices rise, with duty on an average priced bottle of wine poised to increase by a further 7p for still wine, 9p for sparkling and 9p for fortified wine.

These numbers do not include VAT, which will add a further 20% to these increases.

Since the vote to leave the EU, an average priced bottle of wine has risen 33p. Before the referendum result an average priced bottle of wine sold in the UK was £5.40, the latest figures from the WSTA market report revealed an average priced bottle of wine had reached £5.73.

Since 2010, the wine had been “treated more harshly” than other categories of alcoholic drink – 39% increase compared to 27% for spirits and 16% for beer, said Beale.

“This is despite proof that a freeze can benefit both the Treasury and UK businesses. Following the freeze in wine and spirit duty in the November 2017 Budget, between February to August 2018, wine duty income increased by £39 million, up 2% on the same time the previous year,” he said.

The WSTA launched it’s #NoToNoDeal Campaign last month telling Westminster “don’t bottle it” when it comes to delivering a Brexit deal.