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UK drinks trade reacts to surprise July general election

Published:  23 May, 2024

Prime Minister Rishi Sunak’s announcement of a surprise general election on July 4 has stirred significant reactions within the UK drinks trade. 

Speaking outside Downing Street yesterday, Sunak declared this “the moment for Britain to choose its future,” asserting that the Conservative Party could lead the nation through global instability. His address, however, was almost drowned out by the anti-Brexit campaigner Steve Bray, who blasted the New Labour anthem, D: Ream’s “Things Can Only Get Better.” After last August’s alcohol duty hikes, most of the drinks trade is inclined to agree.

His announcement also coincided with the news that, despite the 20% duty hike for over 85% of wines on the UK market since last August, there has been no year-on-year increase in wine duty receipts since September 2023. The latest data from the Office for National Statistics (ONS) shows that alcoholic drinks CPI is nearly three times the headline rate of 2.3%, driven by last August’s record duty increases.

Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA), speaking at the London Wine Fair (LWF), stressed the need for the next government to recognise the economic importance of the UK's wine industry. He argued for fair and proportional taxation and regulation, warning that stifling economic growth would hinder the government’s ability to deliver for the country.

“Of most immediate concern is making the temporary wine easement permanent, which should be resolved before the election,” Beale said. He also advocated for a fairer excise regime that treats wine and spirits equitably, removing distortions favouring certain alcohol categories over others.

Meanwhile, Kate Nicholls, chief executive of UKHospitality, has emphasised the vital role of hospitality businesses in every constituency ahead of the general election. “In serving Britain, the sector creates places where people want to live, work and invest,” Nicholls said. She called for political parties to recognise the strategic importance of the hospitality sector and to include measures in their manifestos that would lower the tax burden, provide greater access to workers, and support job creation and workforce upskilling.

In his LWF address, Beale also highlighted the challenges facing the on-trade sector, which generates nearly 50% of the £22bn GVA from the UK wine and spirit industry. During his ‘State of the Nation’ speech, he called for a thorough review of the factors affecting the economic sustainability of hospitality businesses, including business rates and stressed the need for more than just draught duty relief to ensure the sector’s survival.

Finally, Beale highlighted the importance of social responsibility within the industry. “We need to demonstrate to an incoming government that we are a socially responsible and socially sustainable industry,” he said, urging the sector to reinvigorate its efforts in promoting socially responsible production, consumption and retail of alcohol.

As the UK heads towards an unexpected election, the drinks trade is calling for policies that support economic growth, sustainability and social responsibility, hoping the new government will address these crucial issues.

The polls open on 4 July.