A host of wine and spirit SMEs have joined forces to urge Rishi Sunak to cut wine and spirit duty and extend hospitality’s VAT cut to alcoholic drinks to help boost British business.
The owners of 26 firms, including Chapel Down, Adnams, and Cotswolds, have jointly penned a letter to the Chancellor asking the government for more support for SMEs as businesses fight to stay afloat in the grip of the pandemic.
Much of the UK wine and spirit sector have seen their businesses take a major hit as the hospitality sector was forced to close its doors and shoppers deserted the high street.
The suppliers of the hospitality trade have not been eligible to benefit from the loans and support packages offered by Government to pubs, bars and restaurants.
The letter to the Chancellor asks for support in the shape of a cut to alcohol duty on wines and spirits; and to extend the VAT hospitality cut – until at least March 2022 – broadening the scheme to include all sales of alcoholic drinks.
The WSTA members also highlight how their businesses face significant pressures, especially if the Government decides to raise taxes.
For many SME businesses, the on-trade represents the ‘shop window’ for their products. With repeated closures of venues, until at least March 2021, this shop window has been shuttered and many small businesses are suffering disproportionately.
In the off-trade, too, prices are set to rise for many wine retailers as the additional costs of new trading arrangements with the EU begin to bite, which will have to be passed on to consumers.
Ahead on the next Budget on 3 March, the WSTA-backed letter warns the Chancellor that a rise to the UK’s already significant tax burden is damaging enterprise.
Miles Beale, Chief Executive of the Wine and Spirit Trade Association said: “This Budget comes at a crucial time for British wine and spirit SMEs who have had to baton down the hatches once again as the country sits out a third lockdown without any confidence in knowing when it might end.
“The new and developing trading landscape since 1 January has also put pressure on small and medium size businesses who are picking up the tab for additional import costs and red tape.
“SMEs have worked hard, despite drastic dips to their income, to support communities through efforts like making hand sanitiser and free local deliveries. Britain has some of the world’s highest alcohol tax rates, and it is extremely unfair to pass on more pain to cash strapped consumers and to SMEs fighting to keep their businesses afloat.
“We are asking for the Chancellor’s proactive support to help SMEs – which are the backbone of a successful British industry – to build back better.”
NAM Implications:
- Issue might be that any channel leakage of application of Duty And On-Trade VAT Cuts to off-trade…
- ….could dilute any on-trade gains?
