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Budget: Chancellor announces freeze on all alcohol duty

Published:  11 March, 2020

Duty on wines, spirits and beers is to be frozen, new Chancellor Rishi Sunak announced in today’s budget, allaying trade fears of another rise in line with inflation.

The duty freeze will doubtless be welcomed by the wine industry in particular, which was singled out for a duty rise in the last Budget in 2018, although the freeze is short of the 2% cut called for by the WSTA.  

Commenting on the duty freeze, Miles Beale, CEO, WSTA, said: “The decision to freeze wine and spirit duty is welcome for British business, pubs and the wider hospitality trade. While he has not cut duty, it is reassuring to see that in his first Budget as Chancellor, Rishi Sunak MP, has taken steps to address the UK’s excessively high duty rates.

He has shown he is in touch with British consumers – from all walks of life - who want to enjoy a drink without getting stung by further tax hikes. In particular the UK’s 33 million wine lovers, a large proportion of whom are women, are expressing a sigh of relief after they were singled out for a duty rise at the last Budget. 

“Today’s freeze is a victory for the WSTA’s hard fought campaign which called on government to help cash-strapped consumers by keeping prices down, and to support British businesses entering a new trading landscape.” 

Joe Fattorini, spokesperson for Wine Drinkers UK, said: “The recognition by the Chancellor that wine is the nation’s favourite alcoholic drink and therefore shouldn’t be singled out for tax rises is welcome news for the 33 million wine fans in the UK.”

It was now time to go “one step further and cut back wine tax in the coming year”, he added. 

“The last Chancellor to do so was Nigel Lawson, 36 years ago, when wine would not have been as regular a feature in British shopping baskets. 

“This year, over half of shoppers are set to be priced out as the price of an average bottle rises above £6. With women and the working class being disproportionately penalised by this unfairness, we will continue to lobby for a better deal. It’s high time to reduce wine duty.”   

To describe the backdrop to this year’s Budget as exceptional is something of an understatement.

Since the last Budget, delivered by Philip Hammond on 29 October 2018, there has been a General Election, previous Chancellor Philip Hammond has left the House, and his replacement, Sajid Javid, lasted barely six months and never got to deliver a Budget.

On top of this, the UK has left the EU and is now facing potential huge economic disruption caused by the spread of the coronavirus (Covid-19). As pointed out by Treasury officials, this year is anything but business as usual. 

UK drinkers currently pay £2.23 on duty per bottle of still wine, £2.86 on a bottle of sparkling wine and £8.05 for every bottle of spirit at 40% abv. This means that for every bottle of wine Brits buy 55% of the cash goes on tax and for the average priced bottle of spirits it’s 73%, with the UK alcohol industry is one of the most heavily taxed in Europe.  

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.