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WSTA: Scrap alcohol tax hike to give businesses an Olympic boost


The WSTA is calling on the Treasury to spare hard pressed businesses and consumers from another alcohol duty rise in this year's Budget.    

The alcohol tax escalator threatens to deliver a 7.2% increase in March,[1] even though duty and VAT already account for three quarters of the average price of a bottle of vodka and half the price of a bottle of wine.

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 than if the Games were being held in Paris and triple what they would pay in Madrid.

Pressure on the drinks industry is mounting, with the volume of UK alcohol sales falling by 3 per cent in 2011. In pubs and restaurants, sales of wine dropped by 7 per cent last year and spirits by 3 per cent. Shops also reported a drop in sales of wine and spirits.[2] 

WSTA Interim Chief Executive Gavin Partington said:

"We recognise the pressure there is on the public finances. However easing the duty burden on the drinks industry would boost growth and investment, helping the sector to play its part in the UK's economic recovery.

By scrapping the planned duty increase, the Chancellor would also be providing some much needed relief to consumers whose household budgets are already being squeezed.

With thousands of extra visitors heading to the UK for the Olympic Games, this is no time to force drinks prices up even further."


Notes to editors

[1] 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, the Chancellor announced that the escalator would remain in place for two further years, until 2014-15.

To date, 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. On the basis of RPI to December 2011 of 5.2%, this means the likely duty increase could be around 7.2%.

[2] Sales figures are provided by Nielsen and CGA Strategy.
  
Click here to access the WSTA Budget Submission

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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:      [email protected]


 

 


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