Wine and spirit businesses are calling on the Chancellor to freeze alcohol duty until the end of the Parliament, when he delivers his Autumn Statement on 22 November.
The Wine and Spirit Trade Association (WSTA) is arguing that a duty freeze is the only option to prevent further inflation-stoking price rises for cash-strapped consumers.
If Jeremy Hunt chooses to increase duty by RPI (currently 8.9%), in addition to the rises introduced on 1 August as part of the new duty rates, the cumulative excise duty increases would be 68p on a bottle of wine, £1.50 on a bottle of spirits and £1.67 on a bottle of port.
Such a budget duty hike would mean the Chancellor has announced a 30% increase in wine duty and 20% increase in spirit duty in the space of six months.
If consumers were expected to pay for a second duty rise this year, the average price of a bottle of red wine would go over £8 for the first time. And the average price of a bottle of gin or vodka is expected to exceed £18 for the first time.
“We are calling for a freeze for the remainder of this Parliament to prevent budget-busting price rises,” said Miles Beale, Chief Executive of the WSTA.
“Consumers are still in the grip of a cost of living crisis and cannot afford to keep stretching their budgets just to be able to enjoy some of life’s little luxuries. Wine and spirit businesses need a breathing space to stay afloat in the current economic climate, which continues to combine lethargic growth with persistently high inflation.”
He added: “In August, the Treasury introduced the largest alcohol tax hike for almost 50 years, adding over 10% duty increase for spirits and over 20% increase for 4 out of 5 wines of all wine sold in the UK.
“A further rise would make a mockery of the Government’s priority to cut inflation as further price rises will lead to reduced sales and less revenue to the Exchequer.”
NAM Implications:
- Kinda says it all:
- “A further rise would make a mockery of the Government’s priority to cut inflation…
- …as further prices rises will lead to reduced sales and less revenue to the Exchequer.”
