WSTA makes ‘last-ditch plea’ for duty cut

By James Bayley

Published: 01 March, 2024

The Wine and Spirit Trade Association (WSTA) along with over 100 UK wine and spirit producers, retailers and hospitality businesses have called on the government to cut duty in a ‘last-ditch plea’ ahead of the Budget announcement on 6 March.

In a letter, signed by the WSTA and 120 businesses, the sector has called on chancellor Jeremy Hunt and Gareth Davies MP, exchequer secretary to the Treasury, to announce a duty cut to “help prevent further price rises for consumers, drive down inflation and increase income to the Treasury” and make “permanent the wine easement [that] will save thousands of wine businesses pointless and costly bureaucracy”.

Last week HMRC published the latest excise duty receipts, which for wine and spirits combined showed the Treasury lost £436m between September and January compared with the same period in 2022/23. Combined with losses from beer and cider, Treasury coffers are down by almost £600m since the alcohol duty hikes in August last year.

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Following those duty increases, sales volumes have declined and alcohol inflation has risen to more than double the headline rate. 

Miles Beale, chief executive of the WSTA, said: “Wine and spirit businesses across the country are urging the government to do the right thing at the Budget next week: support British business and boost Treasury coffers by cutting alcohol duty.

“Record high duty hikes last August have now been shown to achieve the exact opposite – and have instead fuelled inflation and significantly reduced excise duty receipts to the exchequer. ”

According to the trade body, in the 12 weeks to December sales of spirits and wine were in decline in Britain’s supermarkets and shops, down 7.1% and 4.1% respectively on the previous year.

UK consumers currently pay £2.67 on duty for a bottle of 12.5% abv wine, compared to the French who pay just 3p equivalent a bottle irrespective of its strength.

“The cost to businesses will run into millions and millions of pounds,” Beale added.

“Unfortunately, the same businesses will have no choice but to pass on these costs to already cash-strapped consumers. We are calling on the chancellor to do himself – and everyone else – a huge favour by cutting alcohol duty and making the wine easement permanent.”

John Colley, CEO of Majestic, the UK’s largest wine retailer added: “The government intended to create an alcohol duty system that was simpler, fairer and less bureaucratic for businesses to administer, but their plans fail on every measure. The proposed change from one duty band to 30 different bands based on abv will be bad for retailers, hospitality businesses, consumers and the wine industry. Common sense needs to prevail and this needs to be stopped."

He added: “This is not just about Majestic. The proposed policy will disproportionately hit small businesses – including the 900 independent wine merchants operating across the UK and the many importers dealing with the international wine trade. It will hammer high street retailers and hospitality venues, threatening growth and, ultimately, people's jobs and livelihoods.”

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