The voice of the wine and spirit industry

The Chancellor decided to continue the alcohol tax escalator, which automatically increases tax on alcohol by two per cent above inflation.

Today’s tax increase adds to the pressure on a sector which has seen volume sales continue to decline in the past year as consumers reined in spending.

The rate of alcohol taxation in the UK is now so out of step with our European neighbours that visitors to the London Olympics will face paying 50 per cent more for an average bottle of wine (£4.89) than if the Games were being held in Paris (£3.26) and triple what they would pay in Madrid (£1.52).

Duty and VAT already account for three quarters of the average price of a bottle of spirits and half the price of a bottle of wine. The latest duty rise equates to:

• 11p more on a 75cl bottle of wine;
• 41p more on a 70cl bottle of spirits at 37.5% abv; and
• 3p more on a pint of beer.

These forecast price increases include VAT.

The tax increase comes into effect from 00.01 on Monday 26 March.

The Chancellor also referenced the Government’s imminent alcohol strategy but did not refer specifically to any proposed measures it may contain.

WSTA Interim Chief Executive Gavin Partington said:

"Today’s Budget puts Britain on course for an Olympic record that gives no cause for celebration.

“Consumers and businesses are already paying the price for the excessive duty increases in recent years and today’s news means more price rises are on the way.

“Whilst we recognise the pressure on the public finances, the mounting duty burden on the sector is holding it back from contributing fully to the UK’s economic recovery.”

Ends

Notes to editors

In March 2008 the Chancellor announced a 4 year tax escalator, to increase duty rates by 2 per cent above the rate of inflation. In March 2010, it was announced that the escalator would remain in place for two further years, until 2014-15.

HM Treasury has based its calculation on a combination of RPI for the 6 months prior to the Budget and RPI forecast for 6 months post-Budget.

The WSTA is the UK organisation for the wine and spirit industry representing over 340 companies producing, importing, transporting and selling wines and spirits. We campaign to promote the industry's interests with governments at home and abroad. We work with our members to promote the responsible production, marketing and sale of alcohol.

For more information please contact Gavin Partington:
Tel: +44 (0) 20 7089 3876
Mob: +44 (0) 7966 014058
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.