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The Chancellor pours out some festive spirit as he heeds WSTA calls to freeze wine and spirit duty

A freeze will save the industry around 247 million pounds which will help industry re-invest and grow.

 

The Wine and Spirit Trade Association has warmly welcomed the Chancellor’s decision to freeze wine and spirit duty at the Budget today (Weds).

 

Philip Hammond made a u-turn on his unpopular plan to increase wine and spirit duty by RPI inflation for a second time this year.

 

Instead the Chancellor has chosen to listen to the WSTA’s call to support our great British industry and British consumers with a festive friendly freeze on February 1st, 2018.

 

The WSTA has calculated that the change in government policy will save the UK wine and spirit trade around £247 million. The wine and spirit industry supports 554,000 British jobs and generates £50 billion for the UK economy. It already contributes over £7.5bn to the Treasury in duty alone.

 

Introducing the duty freeze in today’s Budget the Chancellor highlighted his support for the great British pub, where wine and spirit sales now account for 36% of alcohol sold across the bar.
The freeze will mean that duty on an average priced bottle of still wine will remain at £2.16, sparkling wine stays at £2.77 and duty on an average priced bottle of spirits, at 40% abv, remains £8.05.

 

It is only the second time in 15 years that wine duty has been frozen.

 

The WSTA argued that a freeze or a cut was a win/win for both the Treasury and the wine and spirit industry, which has been proven in previous Budget success stories.

 

After a freeze in wine duty in the 2015 Budget, wine duty income increased by £136m (+3.6%) the following year and after a 2% cut in spirits duty that year, spirits duty income increased by £124m (+4.1%) over the same period.

 

Commenting on the Chancellor’s decision to freeze wine and spirit duty, Miles Beale Chief Executive of the Wine & Spirit Trade Association said:

 

“We are pleased that the Chancellor has found his festive spirit and listened to the call from the WSTA and its members and has frozen wine and spirit duty. He has shown the Government is in touch with what consumers want and is supporting an industry which is proving to be a real asset to British business. He has recognised that rebalancing the UK’s excessive duty rates is a win/win for both the Treasury, the wine and spirit trade – not to mention consumers. This decision will be celebrated by millions who will raise a glass this festive season!”

 

Wine and spirit duty has been frozen at the current RPI inflationary rate of 3.4%. If duty had not been frozen wine and spirit duty would have risen another 3.8% - the Office of Budget Responsibility RPI forecast.

 

This will mean:

• Duty on a 750ml bottle of wine will remain at £2.16
• Duty on a 750ml bottle of sparkling will remain at £2.77
• Duty on a 750ml bottle of fortified will remain at £2.89
• Duty on a 70cl bottle of vodka at 37.5% abv will remain at £7.54
• Duty on a litre bottle of vodka at 37.5% will remain at £10.78
• Duty on a 70cl bottle of Gin at 40% will remain at £8.05
• Duty on a litre bottle of Gin at 40% will remain at £11.50


Bah, humbug! WSTA calls for Chancellor to prove he’s not a Scrooge by freezing duty on our festive tipples.

The UK’s basket of Christmas booze is set to cost an all-time high this year with 53.5 per cent of consumer’s cash going straight to the taxman.

The French will have more to celebrate this Xmas paying just 32 per cent tax.

The Wine and Spirit Trade Association is calling on the Chancellor to freeze wine and spirit duty in tomorrow’s budget or be labelled a Scrooge in the run up to Christmas.

With festive season preparations beginning to get underway British consumers will be amazed to know the true reality of the tax on their shopping. A surprising 76% of the cash paid by shoppers on an average priced bottle of spirit goes straight to the Treasury and 56% of an average priced bottle of wine.

This Christmas 53.5% of a typical festive booze shop will go on tax if Philip Hammond fails to find his Christmas spirit on Budget day.

As a result of the Chancellor raising alcohol duty by 3.9% in the March budget, and if he goes ahead with plans for a second 3.4% rise tomorrow, this year’s basket of Christmas booze will cost  £4.40 more in duty and VAT, 5% more than last Christmas.

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 rake in £1.9 billion over the next five years.

£92.95, of the basket of Christmas booze will go to the taxman, courtesy of VAT and the increasingly excessive duty rates in the UK. This means that tax now accounts for 53.5% of the basket.

Last year consumers paid £88.55 in tax on the cost of the average household’s festive alcohol shop, which was 51% of the total cost.

These calculations are based on a typical festive season shop, consisting of 5 bottles of wine, 2 bottles of Champagne, 2 bottles of sparkling wine, 3 bottles of spirits, 2 bottles of port, 24 cans of beer and 12 ciders. If consumers were chose average priced bottles or cans in this shop it would set a UK family back £173.83, of which £92.95 will go directly to the Treasury.

The French have much more to celebrate this festive season as their shop is £27 cheaper and will pay just £46 in tax, meaning only 32% of the cost goes to the tax man.

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:

“Comparing the wine and spirit tax regime in the UK to that in France puts the UK’s excessively high rate of excise duty firmly in the spotlight. The Treasury will be taking more money than ever off of British businesses and consumers this Christmas if planned duty hikes go ahead.  

A second rise this year will hit businesses hard at a time when they are dealing with higher costs through rising inflation, meeting the challenge of Brexit and decreasing consumer confidence. This will be particularly hard for our industry, its suppliers and consumers, to swallow, coming in the middle of the trade’s busiest period – Christmas.

The Chancellor can avoid being labelled a Scrooge this Christmas by freezing wine and spirit duty at tomorrow’s budget.”

The wine and spirit industry plays a hugely important role in the UK’s economy, directly and indirectly supporting 554,000 jobs and generating £50 billion in economic activity. 

British gin sparkles at the Ambassador’s home in Madrid

Spain takes the crown as the biggest quaffers of British gin on the continent spending a record breaking £94 million last year.

The Wine and Spirit Trade Association visited Madrid this week to share some of the gin gems from all corners of the British Isles.

In a joint event with the Foreign and Commonwealth Office the WSTA invited Spanish importers and gin enthusiasts to the British Ambassador’s residence to sample some of the latest creations crafted by the UK’s top distillers.

From seaweed infused gin made in the Shetland Isles to Lavender gin made in Yorkshire, down to the City of London where gin comes in bottles designed to look like St Paul’s Cathedral and ending up on the south coast in Sussex for gin made from grape skins – British gin makers put on a sparkling showcase.

British Ambassador to Spain, Simon Manley CMG, generously opened up his home to host the gin fest in support the British distillers’ and their ambitious plans to expand their export markets.

In 2016 Britain exported the equivalent of 29 million bottles of gin to Spain worth £94milllion.This was a 10% value increase on 2012. The volume of British gin exported to Spain has increased by 25% since 2012.

Gin has proved to be a firm favourite with the Spanish and makes up a third of all UK spirit products exported to Spain.

Whilst total UK spirit exports have decreased over the last 5 years, gin is bucking the trend and total British gin exports have increased 32% by value to £475m, a fifth of that value comes from Spain.

Simon Manley said: 

“I was delighted to host such an innovative group of distilleries, covering the length and breadth of the United Kingdom. I hope we will soon see their excellent gins in the supermarkets, bars and restaurants of Spain.”

Trade Association colleagues across the Channel have vowed to keep the “special relationship” with the UK wine and spirit industries and join the fight for a free trade agreement. 

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 and together the associations have signed up to a joint Brexit position paper.

Despite the successes of the British gin industry, British government continues to punish its entrepreneurial gin makers with excessively high duty rates. In the UK, 76% of the money paid for an average priced bottle of spirits goes straight to the Treasury. The UK’s spirit duty rate is 4.3 times higher than Spain’s, for example.

This is not just punishing on the public’s purse, but it is holding back some British spirit makers, making it harder to invest in their business and take advantage of new opportunities overseas.

In the last two years we have seen 89 new distilleries opening in the UK bringing the total up to 273, according HMRC records.

A large majority of these are SME’s who are pushing the boundaries through innovation to secure a place in this competitive market. The hugely unfair tax burdens facing these start-ups mean that cash flow is severely restricts small businesses.

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

“British gin is the fastest growing spirits category in the UK. The UK exports more gin to Spain than to anywhere else in Europe. It is beneficial for both governments to secure tariff free trade deals for their wines and spirits.

“The WSTA has been working closely with our European trade partners on what is a shared ambition for a frictionless Brexit.

“Closer to home, we are calling for the Chancellor Philip Hammond to support the British gin industry by freezing spirit duty at the Budget on 22nd November. Gin is a standout British success story, and its potential could be a tonic for UK exporting. It needs support from government though – freezing excuse duty and abolishing automatic annual rises would be a good start.” 

Quality of English Albariño stuns the Spanish

England’s first attempt at Albarino wine gets a stamp of approval in the country best known for growing the popular grape.

The Wine and Spirit Trade Association took an English Albarino to Madrid to test Spanish wine experts in a blind tasting – the outcome surprised everyone.           

Chapel Down Winery in Kent are the only UK vineyard to have been brave enough to make a wine from 100% Albariño  – a grape associated with Galicia in northwest Spain.

Its 2014 vintage comes from England’s first Albariño vineyard in Sandhurst planted on clay. Thanks to an early spring that year, this small corner of Kent experienced similar weather to the Galician climate giving the Albariño grapes a longer time to ripen.

The fruit was pressed and 30% of it was fermented and matured in old French oak barrels while the remainder fermented in stainless steel vats. This was followed by 9 months maturing on the lees.

The result of this process is a wine that stunned the Spanish for its ‘full’, ‘rich’ and ‘artisanal’ qualities.

The two wines going up against each other were Chapel Down Albariño 2014 limited edition, which retails at £25 alongside a bottle of Paz de San Mauro 2016, Rias Baixas, Albariño from Galicia which sells in Spain for €13.40.

The top team of wine connoisseurs taking part in the blind tasting included Pau Roca, Secretary General at Federación Española del Vino (FEV),

James Blick founder of Spanish food and wine tour firm Devour Tours, Juan Manuel Bellver, Director of Lavinia specialist wine shop and restaurant and WSTA Chief Executive Miles Beale.

Pau was sceptical at first that the English could produce a decent Albariño and was confident it would be clear which one was the Spanish and which one the English.

Both Pau and Miles incorrectly identified the origins of the wines. Juan identified that the Spanish Albariño saying it was clearly a wine made on a larger scale and James also correctly assessed which wine came from which country – but admitted he was stunned that one of them came from the UK.

All the tasters came away impressed by the quality of the English wine.

Pau said:

“I am astounded. I really thought the English wine was the Spanish and the Spanish was the English. I was sceptical when I was asked to taste and English Albariño and would not have thought that the grape would adapt well to English climate but it is a very good wine. I liked both wines but the English one was rounded and full of flavour.”

James Blick who runs the Spanish food and wine tour company Devour Tours, said:

“The English Albariño took us all a little by surprise. It was tight, racy and well-balanced. A very good wine that at once reminded you of a white from Rías Baixas and yet clearly had its own thing going on. This rather informal Judgement of Madrid reconfirmed that the English have the know-how, determination and - most importantly - terroir, to make great wine.

Juan Manuel Bellver, Director of one of Spain’s leading specialist wine shops and restaurant Lavinia, said:

“The English Albariño is a very interesting wine. It is full on the nose and rich in the mouth. I am impressed with the artisanal style of the wine. The winemaker has taken time to create something which tastes good, he knows what he is doing.”

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

“Unlike my fellow tasters I had the advantage of knowing that in England we are very capable of making excellent quality wine, but even I didn’t expect it to taste better than an Albarino from Spain. In my opinion it packed more of a punch, which was why I thought the Spanish one was the English. I was delighted that my fellow tasters were equally impressed by the Chapel Down Albarino. It is yet another example of how English wine makers are proving their products can compete with top quality wines across the globe.”

Josh Donaghay-Spire, Chapel Down Head Winemaker, said:

To have had the opportunity to make England’s first Albariño was incredibly exciting, for it to then receive such a positive reception in its spiritual home is truly humbling and shows the potential of the great terroir we have here in Kent.”

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.

In the last ten years the area of vines planted in the UK has more than doubled and is set to grow by a further 50% by 2020.

The UK is a valuable market for Spanish wine and is the second largest market by value and 4th largest by volume. Britain accounts for about 12% of the Spanish wine export market and 6% by volume.

This summer UK consumers drank over 23 million bottles of Spanish wine up 4% on last year, worth £165 million.  

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.”

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