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WSTA reiterates call for duty cut

Published:  21 January, 2020

The Wine & Spirit Trade Association (WSTA) has reiterated its call for a cut in duty.    

In its Budget submission, which was sent to the Treasury today (Tuesday), the WSTA urged the Chancellor to cut wine and spirits duty by 2% in the forthcoming Budget.     

By delivering a freeze to wine and spirits in 2017 the Treasury landed a bumper tax windfall and at the same time helped cash strapped consumers and gave a boost to British businesses.

But the respite was short lived. In 2018 the Chancellor chose to once again freeze spirit duty but singled out wine for an unfair duty rise.

“We recognise the fact that alcohol duty is an important revenue stream for government to fund public services, which is precisely why we are calling for a 2% duty cut on wine and spirits. 

“A cut will not only boost Treasury coffers but also bring a boost post-Brexit to British businesses and consumers, whereas another rise will have a negative impact on all three,” said Miles Beale, CEO of the WSTA. 

According to the government’s recent Alcohol Duty Bulletin, in the last six months since the wine duty hike there has been a slump in wine sales leading to a 2.1% drop in revenue to the Exchequer – falling to £2.4bn down from just over £2.5bn. 

If the same rate of decline continues, WSTA said forecasts show the Treasury will lose £93m in 2019 compared to 2018.

For beer and spirits, both of which received a duty freeze at the last Budget, the revenue income was more positive with beer up 2.4% and sprits up 1.7%.

“Duty rises are bad for consumers, bad for business and bad for the Exchequer, as the government’s own figures clearly show. After wine was singled out for a duty rise wine revenues have fallen on the previous year, in line with a slump in wine sales.

“If government chooses to increase what are already some of the world’s highest alcohol tax rates, it will not only push up prices for people who voted them in but also hit hard an industry that prides itself in flying the flag for brand Britain,” said Beale. 

“We agree it’s time for government to change the UK’s unfair, outdated and restrictive wine and spirit duty regime. However, the Chancellor should pre-empt reform with a duty cut, he added. ”

British drinkers currently pay 68% of all wine duties collected by all 28 EU member states and 27% of all spirits duties. This is by far the most of any member state despite accounting for only 11% of the total EU population.