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Beale: ‘Punishingly high duty rates stifling home grown wine and spirit businesses’

Published:  28 January, 2021

The WSTA has renewed its calls on the Chancellor to cut alcohol duty to allow UK businesses to “thrive and compete on a global stage”. 

Ahead of the forthcoming Budget on 3 March, and as Britain takes its new place outside of the EU, the trade body has voiced concern that the UK’s excessively high duty rates are deterring investment.

A duty cut would provide the UK’s wine and spirit businesses the “breathing space” needed to recover from the pandemic, allowing them time to plan for growth, including innovation and exploring new opportunities, said CEO Miles Beale.

“The UK ‘s punishingly high duty rates are stifling home grown wine and spirit businesses as well as acting as a deterrent to attracting investment."

Moreover, “from experience we also know that duty cuts often lead to increased revenue for the Exchequer – from both VAT and duty receipts”, he added. 

In the current climate, hikes would undermine the viability of some businesses and reduce the ambition of others, warned Beale.

“In particular tax increases will suppress already falling demand, by raising prices to consumers, as well as reducing choice. Indeed, duty increases would send all the wrong signals to consumers and to UK drinks businesses, most of which are SMEs. It would be the perfect blend for exacerbating the adverse effects of Covid and undermining recovery and future growth,” he said. 

The UK alcohol industry is one of the most heavily taxed in Europe, with Brits currently paying £2.23 on duty per bottle of still wine, £2.86 on a bottle of bubbles and £8.05 for every bottle of spirit at 40% abv.

Drinkers in Germany, Spain and Italy all enjoy a zero duty rate on wine, whilst in France the duty rate is just 3p.

Last week, Wine Drinkers UK also renewed its calls for the government to recognise wine as the UK’s favourite drink by cutting increasingly taxes.

The UK’s wine and spirit industry supports some 360,000 jobs in the UK, contributing £49bn every year in economic activity and paying more than £12bn in duty and VAT.