Last week the WSTA launched our annual Budget effort with an ambitious, but achievable aim of convincing the Chancellor to cut wine and spirits duty by 2% in the Budget Statement on the 8th March. The facts about duty are well known:
· Wine businesses and consumers pay £4bn in duty and spirits businesses and consumers a further £3.2bn.
· The duty on a bottle of wine is £2.08, meaning that 55% of the cost of the average bottle in shops and super markets is taken up in tax and VAT.
· The duty on a 70cl bottle of spirits is £7.26, meaning that 76% of the cost of the average bottle of spirits in shops and supermarkets is taken up by duty and VAT.
· Duty rates for wine have increased by 56% since 2007 and spirits duty rates have increased by 41%
· UK businesses and consumers pay the 4th highest duty rate for spirits in the EU accounting for a quarter of all Spirits Duties (27.29%).
· UK businesses and consumers pay the 3rd highest duty rate for wine in the EU accounting for 68.4% of all duties collected by member states.
While it may seem clear cut to us, achieving a 2% cut is an ambitious ask. The Government is still committed to reducing the deficit and the impact of Brexit means that every industry is looking for support to meet the new challenges we all face.
But it is particularly the case for wine duty. On top of very high excise duty, wine has been singled out for worse treatment for a number of years and has been hit with historic duty rises of 56% since 2007. It now faces the triple threat of the pound's devaluation, rising inflation and further duty rises. It is vital each and every wine business gets involved and raises these issues with their MP.
I am convinced this is achievable and believe that, with an unprecedented and concerted effort by the industry, we can convince the Chancellor to make the right choice to back British businesses and make the cut. This is why we are issuing a challenge to all our members, particularly in the wine industry, to contact their MP and make the case to them.
Politicians will need to see first-hand the breadth and value of the industry to the UK if they are to understand the positive impact a 2% duty cut can have for our businesses, consumers and – perhaps surprisingly - the Treasury. The only way they can do this is if businesses themselves engage directly with their local representatives.
Such a move would be worth 10p for a bottle of wine, 13p for a bottle of sparkling wine and 55p for a litre of spirits compared to an inflationary rise of 3%. Independent economic modelling shows that a 2% cut would boost the industry’s economic contribution by £2.9bn to a record £52.6bn and even lead to increased Treasury revenues of £368m.
The WSTA’s pack has been sent out to our members and the team will be supporting businesses by helping them identify their local MP and giving them all the data they need to make the case. WSTA members can download this pack from the WSTA website here: http://www.wsta.co.uk/what-we-do/budget-2017