Chancellor Philip Hammond disappointed the Wine and Spirit Trade Association (WSTA) with his March budget announcement that spirit and wine duty will rise with inflation, a decision the association has described as an opportunity missed, creating a tough landscape for the industry and consumers.
The association’s Chief Executive, Miles Beale accused the Chancellor of failing to support the trade, stating that the increases come on top of already excessive and unfair rates of duty that consumers and businesses face in the UK. Mr Beale explained how Brexit, and rising inflation, were creating difficult circumstances for the industry. With another budget due six months later, Mr Beale believed this would impact confidence for both consumers and business.
Expected impact of increases
The WSTA calculations of duty after this budget are:
8p on a 75cl bottle of wine: total duty £2.16
10p on a 75cl bottle of sparkling wine: total duty £2.77
11p on fortified wine: total duty £2.89
28p on a 70cl bottle of vodka: total duty £7.54
40p on a litre of vodka: total duty £10.78
43p on a litre of gin: total duty £11.50.
The government also promised a consultation to add a new duty band that would create a duty band for lower alcohol (5-8.5%abv) still and made wine, and a similar band for still cider below 7.5%, to specifically target high alcohol white cider.
Consumers in the UK pay far more in duty than their European counterparts. The Drinks Business recently wrote that in the UK, more than half the price paid for a bottle of still wine is made up of duty and VAT, while in France they pay just 3p per bottle.
According to the WSTA, the British wine trade generates over £17 billion in trade, through diverse outlets such as pubs and bars, supermarkets, convenience stores and online wine merchants in Northern Ireland and throughout the UK such as http://thewinecompanyni.com/.
Ahead of the budget, trade associations including the WSTA, the Scotch Whisky Association and the British Beer and Pubs Association called on the Chancellor to support the industry and review the excise system with the Chancellor’s decision to increase duty being described as a major setback. With a general election on the horizon, the industry will be looking to all parties for promises of support.