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In this together

Published:  29 January, 2009

As Harpers goes to press the rumours circling at Westminster suggest the Chancellor is planning to delay this year's Budget beyond the customary mid-March period, writes Jeremy Beadles, chief executive of the Wine and Spirit Trade Association.

So what I hear you say...Well in some ways the delay gives us in the industry more time to present our case and as the weeks roll on it is becoming ever clearer that the wine sector is feeling the chill wind of recession.

A few weeks ago Constellation announced 50 job losses. Now Gallo are consulting on cutbacks in the UK and in the last few days the word from around the industry is of scores more job losses to follow.

It's grim news for a sector that has achieved such sustained growth over the years and in normal circumstances not something I would wish to crow about.
But the fact is that job losses, cutbacks in investment and the extra burden that implies for the state with increased costs of unemployment graphically illustrate what we have been warning politicians about for some time.

You can't go on taxing the product to high heaven and imagine it call be soaked up with no consequence whatsoever.

What's more it's becoming ever clearer that declining sales also have a consequence for revenue from excise duty. In the six months from April to September 2008, Treasury revenue from excise duty on alcohol was £137 million lower than forecast.

That shortfall will scarcely comfort those in the drinks industry facing either unemployment or a year of uncertainty.
We're in this together which is why we and the other main trade associations in the drinks industry have come together to make a joint Budget submission this year.

The industry simply cannot withstand a further tax increase and we are urging the Chancellor to reverse plans for the tax escalator and promise no further tax increase in this year's Budget.
The truth is that the tax regime in the UK is making this country an unattractive market in which to invest. Why bother investing in building and marketing a brand if a customer turning up to buy a case is effectively going to see more than half of it sequestered by the Treasury?

We are not arguing for a handout, unlike others. We simply ask not to be hit again. The fight is on to persuade the Chancellor to rethink.