Soapbox: Time to look beyond duty easement

By Andrew Catchpole

Published: 18 December, 2024

Barring a near-miracle, it is now highly unlikely that the current UK government will make permanent the temporary duty easement that is ending this coming 1 February. Speaking with Andrew Catchpole for the first of a two-part Soapbox, Miles Beale of the Wine & Spirit Trade Association (WSTA) – who campaigned tirelessly on that matter and helped galvanise the trade – says it’s time to learn the lessons from this “incredibly disappointing” outcome and look ahead to the key bumps coming down the road in 2025. The trade can, he argues, force through more positive and desirable outcomes in the near future, if it pulls together in a similarly galvanised way.

“We spent most of the last year focusing on seeing if we could improve the result of the alcohol duty review initiated by Rishi Sunak when he was chancellor, and we felt that our best chance was with the first Budget from a new government. But that left us with a slightly different issue, which was ‘how do you do something about duty when you’re a brand-new government and don’t know much about it?’. And there are so many things that a new government has to look at or listen to.

“The answer is, we ran a great campaign with a lot of support, including from Harpers, but really broad support from across the trade, including indie businesses who are not all members of ours, a lot of people joined in. So, the campaign was great, except, of course, the outcome, which was incredibly disappointing, because it was no change. They either played [beer, wine and spirits] off against each other, with different duty rates, or ignored us.

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“In fact, the Budget was pretty anti-business generally. But I take some heart from the campaign, because so many people came together and supported it.

“Where does that leave us, what did we learn? Well, first, for me, this is our superpower; we, as an industry, can be in no doubt that unless we are absolutely united across the drinks’ trade, we will get nothing. And secondly, this government is not business friendly. The conclusion has to be that we need to get together, we need to lobby, we need to make ourselves more painful, but bigger.

“With duty we are having a last flurry of effort, in particular because Tim Atkin has put together the ‘Cap the Wine Tax’ campaign [and] we have a petition pending in government in support of that. But that is the last knockings before 1 February, because you need a legislative vehicle to make the changes we want, or to stop what’s going to happen otherwise, because [the duty changes and rises] are already legislated for with wine.

“Ironically, the Tory party won’t oppose it, in the same way as the Labour government haven’t stopped it, because they can both point at each other and say, ‘well, it’s them that did it’.

“The salutary lesson looking forward is that, however important duty is, I would say there are three things that will be more important in 2025. One is environmental policy, or green taxes. The next is health policy, which could be health taxes of one description or another, or might come back to MUP, or restrictions on advertising and marketing.

“The last one is tariffs, which I think is the one that is most obvious, because it’s a Trump 2.0 issue. I think it is highly likely that Trump will arrive and slap tariffs back on all of those things he did before, aluminium, steel, [related to] the Airbus-Boing dispute, and so on. And although it had nothing to do with [the drinks’ trade], we were victims in that particular battle. They’ve been suspended until 25 March and 26 July, respectively, but they could come back at 50% for wines and 25% for spirits.

“What we are already saying to the UK government is ‘don’t be a bystander, get involved, get to know the new Trump administration, whoever they are, because they are the one’s you’ll have to deal with over the next four years. So, what we want is something proactive.

“So, we need to move on, we need to concentrate on what the next challenges are. Context is everything – if the economy was going great guns, if everyone was making money, an additional green tax or health tax would be annoying, but not the end of the world. If, on the other hand, consumption is declining, sales are declining, even value is in decline, and consumers don’t feel confident, because the cost-of-living crisis is still here, inflation isn’t going away and wages aren’t really growing, that’s a pretty difficult context in which to add more costs to a product that you have already just increased by a pound-plus for most wines.

“At the moment, we are very focused on getting WSTA members to be active, we know how to lobby, it’s just less likely to be duty and more likely to be what’s happening next.”

A more in-depth look at the issues highlighted above, what they could mean for the trade and how we should push back, will appear in the second part of this Soapbox interview with Miles Beale after the Christmas and New Year break.

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