Supreme Court backs minimum unit pricing in Scotland

The UK Supreme Court has unanimously dismissed an appeal by the Scotch Whisky Association (SWA) against minimum unit pricing of alcohol.

This means it has rejected the remaining ground of challenge from the SWA which argued that MUP restricts the free movement of goods and is disproportionate under EU law.

Seven Supreme Court judges ruled the measure was “appropriately targeted, lawful and a proportionate means of achieving a legitimate aim.”

The judgment shows that the Supreme Court rejected the claim that less restrictive measures (duty, VAT) could be used to achieve the same outcome.

After the Supreme Court verdict Scotland will be the first country in the world to establish a 50p-per-unit minimum on any alcohol sold in an attempt tackle alcohol misuse.

The ruling said the aim of MUP is “to strike at alcohol misuse and over consumption…in the health and social problems suffered by those in poverty.”

It said: “minimum pricing targets cheap alcohol and the groups most affected in a way that an increase in excise or VAT does not”, claiming it is “easier to understand and simpler to enforce.”

The judges noted that MUP will be experimental. The provisional nature of MUP - as indicated by the Sunset Clause – and the requirement to review the effectiveness of MUP against the aims of the legislation were a significant factor in the Court’s judgment. 

Miles Beale Chief Executive of the Wine and Spirit Trade Association said:

“We accept the UK Supreme Court’s ruling on Minimum Unit Pricing (MUP) in Scotland.

The WSTA remains committed to working with the Scottish Government – and all UK governments – on policies that have already proved effective, like partnership solutions that are locally-targeted, promote alcohol education and better enforce existing regulations.

We look to the Scottish Government to provide clarity to businesses on how Minimum Unit Pricing will be implemented and to give them sufficient time to do so as efficiently as possible. Equally, MUP’s impact on businesses and on all consumers must be rigorously and objectively monitored and evaluated over time.”

British Gin makers call for Chancellor to put spirit duty rise on ice

Gin makers have joined forces to call for the Chancellor to freeze spirit duty and head off a painful tax bill set to stifle the British gin boom.

21 distillers have so far teamed up with the Wine and Spirit Trade Association and written to Philip Hammond and the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, raising serious concerns over a planned increase to spirits duty at the Budget in November.

Gin duties collected in the UK will go up around £25million on last year if Philip Hammond puts the boot into booze at the Budget and raises duty again for the second time this year.

In March the Chancellor increased spirit duty by inflation at 3.9% which added 30p to an average priced bottle of spirits. Yet despite the rise, the Chancellor now plans another increase to spirit duty again, just 8 months after the last one, by 3.4% adding another 26p to bottle.

The sneaky inflationary increases are part of a government policy planned to last for the duration of this Parliament, which means the Government is set to claw in £2billion from British gin over the next five years.

Entrepreneurial spirit makers are warning that the tax burden will stifle the growth of innovative, creative start-ups who have helped drive the gin renaissance and allowed British gin to break records both home and abroad.

The gin distillers’ plea for a freeze comes a week after frustrated English wine producers signed a joint letter to Hammond calling for him to scrap planned wine duty hikes and support the home grown wine industry.

Matthew Gammell, Co-founder of Pickering’s Gin in Edinburgh, said:

“In 2016 Summerhall Distillery paid 31% of its annual turnover in duty alone. Our bottles retail at £29.95 which means that 45% of the money spent on a bottle of Pickering’s gin goes on duty and VAT.

"These hugely unfair tax burdens mean that cash flow is severely restricted when a business like ours is trying to grow. The current proposed increase in duty of 3.4% would mean an increase in duty of £24,500 which for us is the equivalent of another employee. We would like to continue to grow and help boost the British economy but it is becoming increasingly tough to remain competitive in the marketplace.”

The small distillery has big ambitions and have launched projects including gin bauble Christmas decorations and a range of gins made for Cunard, but say they need Government support to fulfil their potential.

Alex Wolpert, founder of the East London Liquor Company, said:

“We absolutely support a freeze to spirit duty, particularly as this is an opportunistic second increase this year at a time the government knows only too well that alcohol sales increase considerably over the festive period; duty already accounts for approximately 40% of our bottle price. With the current economic landscape, including the cost of living increasing and wages at an all-time low, the consumer ends up being the one to foot the chancellor’s duty increase, perpetuating the problem of the public’s expendable income being further reduced.”

Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said:

“The gin renaissance has benefited from the craft cocktail craze which has been sweeping the country in the last couple of years. We have seen a rapid growth in the number of distilleries in the UK and a new wave of UK and spirit makers are turning their hand to gin production in a bid to keep up with the thirst for new gin experiences.

"However, government is stifling the gin boom by adding to its already high tax bill this year. British gin is a global phenomenon which is why we are asking the Chancellor why he is penalising what Britain does best? By freezing spirit duty he would be allowing industry to invest, create jobs and grow.”

2016 was dubbed the year of gin by the WSTA after sales in the UK broke the £1billion barrier.

British gin is now worth £1.2billion in sales to shops, pubs, bars and restaurants with over 45 million bottles sold last year, an increase of 36% since 2012.

In the last five years, the number of distilleries in the UK has more than doubled to 273, with 40 opening in 2016 alone. The most notable increase was in England with 84 opening in the last five years.

The UK is the biggest gin exporter in the world. British gin exports are now worth more to the UK than beef with exports, valued at £475million last year.

The WSTA has calculated that if the government goes ahead with its punitive plans for duty hikes, lasting the duration of this Parliament, then tax on a bottle of gin will go up by over a pound from £8.05 in 2017 to a predicted £9.13 by 2021.*

Following the cut in spirits duty in the 2015 budget, spirits duty income increased on the previous year by £124m (+4.1%) from April 2015 to March 2016 inclusive.

Wine and Spirit trade bodies from both sides of the channel sign up to a united approach to Brexit

The Wine and Spirit Trade Association has joined up with trade bodies from across Europe to agree a ground breaking Brexit position paper,  accompanied by the Press Release

While politicians refuse to discuss the future trade relationship between the UK and the EU, prior to agreeing the financial settlement, the WSTA has been working hard behind the scenes to secure the continued flow of goods post Brexit.

Partnering with - the Scotch Whisky Association (SWA), spiritsEUROPE and the Comité Européen des Entreprises Vins - the WSTA suggested that it was up to industry to nail down key issues long before the Article 50 deadline and are calling on politicians on both sides to do the same.

With officials continuing to lock horns over Britain’s exit from the EU the trade has decided to take the bull by the horns and lead the charge.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:

“The WSTA is unique in its representation of both wine and spirit businesses. Both the European Council and the British Prime Minister have emphasised the need for the EU27 and UK to remain close partners in the future. There is little sign of any progress being made to ensure this happens which has led the WSTA and trade bodies throughout Europe to take the bull by the horns and publish a position paper to protect our shared wine and spirits industry.

“At the WSTA, we have been calling for transitional arrangements to give us as much time as possible to adapt to Brexit, with the aim of securing an agreement between the EU and UK that ensures frictionless trade, preserves fair competition and maintains consumers’ confidence in our products.

“We, like our partners in the wine and spirit trade across Europe, strongly support the UK and EU securing a comprehensive trade agreement that enables us to continue to do business and provide our products to consumers across the continent.”

Unlike the politicians negotiating the divorce bill there is a high degree of positive integration and collaboration within the European wine and spirit sector who have worked together for the last 44 years.

In what is believed to be a first, the joint paper sets out the European industry’s shared Brexit requests and maps out how to overcome issues affecting the industry.

The wine and spirit sectors currently depend on the freedom of movement of goods, and also benefit from the freedom of movement of people and capital within the EU. These benefits are currently extended to the UK as a result of EU membership, and ensure smooth transit of goods across the continent.

The wine and spirits industry has come together to urge the EU and UK to reach a negotiated settlement that preserves trade flows and avoid border tariffs and related administration costs.

The paper makes clear that it is the united position of wine and spirit producers across Europe that no deal is an unacceptable outcome from negotiations.

A post-Brexit relationship should also look to preserve the high degree of harmonisation and convergence of legislation found in both the EU and UK markets, with continued harmonisation of wine and spirits definitions, wine making practices and mutual recognition of Geographical Indicators (GIs).

The trade bodies outline 46 existing spirit categories, including many that are deeply rooted in European culture and tradition, like whisky and vodka, and around 240 registered GIs that offer protection to Cognac, Scotch Whisky and Irish Whiskey.

The UK is the world’s second largest importer of wine by volume and by value and is a significant market for wines produced in the EU, whilst the EU represents a significant export market for British spirits.

Wine and spirits traded between the EU and UK are not currently subject to tariffs, and unless the UK remains in the Customs Union, or a Free Trade Agreement is negotiated between EU and UK, this tariff-free environment would change post-Brexit.

Jean-Marie Barrière, President of CEEV said:

“We produce high-quality products – including PDO/PDI wines and GI spirit drinks – that support hundreds of thousands of jobs, investment, and significant bilateral trade between the EU27 and the UK.”

Joep Stassen, President of spiritsEurope said:

“The continued success of our sector relies on the agreement of a framework for the future relationship; and the transitional rules that would ensure trade continues with minimum disruption after the UK’s exit from the EU.”

English vineyards call on Hammond to freeze wine duty

Philip Hammond is being urged to scrap planned tax rises to support the home grown English and Welsh wine industry.

Frustrated English wine producers have put their concerns over Government’s lack of support for the industry in a letter to the Chancellor and Environment Secretary Michael Gove calling for a freeze on wine duty.

In the letter signed by 12 of the WSTA English wine members says the significant tax burden is restricting growth and is damaging to rural communities.

Britain’s biggest wine producers want to understand why the Government insists on taxing what we do best most heavily.

Sam Linter Managing Director and Head Winemaker at Bolney Wine Estate:
“We find it difficult understand why the Chancellor insists on continuing to tax so heavily this great British product. We can now proudly say that our wines are competing with some of the best all over the world, and it is disappointing that we are being taxed so heavily at home. We are fully behind the WSTA’s call for the chancellor to freeze wine duty and help the English wine industry continue to grow.”

Mark Driver, founder and owner of Rathfinny Wine Estate with his wife Sarah, said:

“When two thirds of wine produced in England is sparkling wine and it’s widely perceived as some of the best sparkling wine in the world, it seems illogical that the duty on sparkling wine is 28% higher than still wine. In fact it’s the most harshly treated of all alcohol categories. We support the WSTA’s call to freeze wine duty and we’d like to see the government support our growing domestic sparkling wine industry by harmonising the rate of duty between still and sparkling wine.”

In March the Chancellor increased wine duty by 3.9% which added 8p to a bottle of still wine and 10p to sparkling. Yet despite the rise, the Chancellor now plans to increase wine duty again, just 8 months after the last one, by 3.4% in the November Budget adding another 7p to still and 9p on sparkling.

The rapid spread of English vineyards making top quality wine has led experts to comment that the UK is where New Zealand was 30 years ago in the comparative size and the success of its wine industry.

To have a chance of emulating New Zealand’s successes English and Welsh wine industry needs its governments backing.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:

“English wine is a great British success story and we are now producing top quality wines for the home market as well as to export. The UK has the potential to follow in the footsteps of New Zealand’s trail blazing wine success story, yet the industry is being held back by the staggering amount of duty it has to pay. By adding to its already high tax bill this year, the Chancellor will hurt the industry's ability to grow, invest export and create jobs.

We therefore urge the Chancellor to support this home grown industry and freeze duty in the November budget.”

Following the freeze in 2015, wine duty income increased by £136m, up 3.6%, on the previous year.

The current Chancellor’s harsh duty policy is a stark contrast to how other countries treat their vineyards and wine makers.

Around two thirds of the wine made in England and Wales is sparkling wine which attracts the most duty, at £2.77 on a bottle of fizz. UK consumers pay £2.16 for a bottle of still wine.

In New Zealand they pay less than half the duty at £1.18per bottle of still or sparkling wine.

In France, where the wine industry is heavily supported, consumers pay the equivalent of just 7p a bottle on duty for sparkling and 3p for still.

In the EU only Ireland, with no domestic wine industry, has a higher rate of excise duty on sparkling wine.

The UK alcohol industry is one of the most heavily taxed in Europe, with British drinkers paying an extraordinary 68% of all wine duties collected by all 28 EU member states. This is by far the most of any member state despite accounting for only 11 per cent of the total EU population.

English sparkling wine has been gaining international recognition over the past few years, leading to a trophy cabinet bursting with awards and attracting Champagne houses, such as Taittinger and Pommery, to invest in English vineyards.

There are over 500 Vineyards in England and Wales and around 150 wineries producing 5m bottles of wine a year.

An English wine producer selling 250,000 Bottles of sparkling wine in the UK this year will face a duty bill of close to £692,500. The rise in March added £26,000 to this bill and the Government’s planned rise will add a further £24,000 in November. This is money that could have gone in to investing in new land, vines, machinery, growing its workforce or helping it export.

UK’s punitive wine and spirit duty rates are turn off for trade

The WSTA is calling for a freeze to wine and spirit duty in the Budget on November 22nd to help back British business and bolster Brexit trade deal opportunities.

Phillip Hammond is due to increase duty by another projected inflationary rise of 3.4%, in the second punishment Budget of the year, as the Government moves its main fiscal event from spring to autumn.

In March this year the Chancellor raised all alcohol duties by an eye-watering 3.9% which added 8p to an average priced bottle of wine and 30p on a bottle of spirits.

The WSTA is warning that there will be little to celebrate this festive season with duty set to go up again, a month before Christmas, adding another 7p on a bottle of wine and 26p for spirits.

The looming hike in duty causes real concerns for UK wine importers who fear the unappealing duty regime will hamper trade negotiations and damage future investments.

Following the release of the Government’s white paper on trade this week Liam Fox highlighted that imports to the UK were just as vital to the economy as exports.

The wine and spirit trade with the EU is worth almost £4.5 billion to the UK. In 2016 the UK traded £2.2 billion of spirits with the EU and traded just shy of £2.3 billion in wine.

The last time the UK experienced a double hit on alcohol duty increases was almost a decade ago under a Labour government and during the financial crisis of 2008.

Overall plans for an inflationary rise, in a second Budget in November, would cost the wine and spirit industry around £220m in new tax liabilities.

The industry faces £1.9bn higher duty bill by 2022 if rises planned for the duration of Parliament go ahead.

The WSTA is calling on members to lobby MP’s to highlight the UK’s grossly unfair alcohol taxation policy which is leaving everyone out of pocket.

Wine businesses and consumers already pay a staggering £4.2bn in duty each year and spirits consumers and businesses £3.4bn.

Duty is so high that 56% of the average bottle of wine in shops and supermarkets is now taken by the Treasury in tax and VAT and an eye watering 76% of a bottle of spirits.

The UK alcohol industry is one of the most heavily taxed in Europe, with British drinkers paying an extraordinary 68% of all wine duties collected by all 28 EU member states and 27% of all spirits duties. This is by far the most of any member state despite accounting for only 11 per cent of the total EU population.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said:

“We are hearing very mixed messages from government. On the one hand Liam Fox is championing the importance of imports to the UK. At the same time Philip Hammond is revving up to hit us with a second inflation busting hike in seven months in alcohol duty – making the UK less attractive to importers.

"Don’t be fooled into thinking that when the Chancellor announces “no change” to alcohol duty plans that he is doing everyone a favour. No change means that duty on all alcohol will rise in line with RPI inflation which in March meant a rise of 3.9%. Next month we are set to see yet another 3.4% added to the staggering amount British consumers already pay in wine and spirit duty.

"Whether it’s English Vineyards, new start up distilleries, producers, distributors or retailers, there are hundreds of British businesses that will be hit hard by another such increase.

"This is why we are calling on our members to contact their MPs and ask the Chancellor to end these unpopular duty rises and support our great British wine and spirits industry. By freezing duty the Government can support British businesses and consumers and even help to increase revenue to the Exchequer.”

The WSTA is arguing that a duty freeze is not only beneficial UK wine and spirit businesses, but also to Government given recent evidence that rebalancing the UK’s unfair wine and spirits tax regime can actually lead to an increase in duty revenues.

HMRC figures show that following the freeze in the 2015 budget, wine duty income actually increased over the following year by £136m (+3.6%) and following the 2% cut to spirits duty that year it actually helped to increased revenues by £124m over the same period.

When spirits duty was frozen in 2016, revenues actually increased by 7% the following year.


Twitter @wstauk

RT @optawine: £2.16 - the amount of duty per bottle of wine; 72 times the amount paid in France and in Germany consumers pay nothing. Surel…

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RT @optawine: £570 - saving per pub if @PhilipHammondUK were to freeze duty on wine and spirits on 22 November #Budget #freezeitphil https:…

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