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Women bear the brunt as beer tax cut wiped out by wine and spirit increases


New analysis from the Wine and Spirit Trade Association (WSTA) has found that the financial benefit that pubs might expect from the beer tax cut will be wiped out by the wines and spirits tax rises, with women bearing the brunt of the costs in both the on and off-trade.


New analysis shows that if alcohol sales in the on trade continue at a similar level to last year, pubs, clubs and bars will be paying almost £34 million extra in tax in 2013/14 compared to 2012/13. By continuing the duty escalator on all other alcohol products the Chancellor has increased the tax burden across the entire trade by £292 million.

Women are expected to be hardest hit by these price rises paying out some £65 million more than men – 61% of the total. Figures show that 63% of what women drink is wine, compared to 33% for men. Women also drink more spirits than men – 22% compared to 13%. In comparison, 51% of what men drink is lager or ale – while this figure sits at 8% for women.

Wine and Spirit Trade Association Chief Executive Miles Beale said:

“The Chancellor aimed to support pubs with a tax cut for beer in the Budget, but the fact is that his tax rises of over 5% on wines and spirits will wipe out the tax cut for beer and add another £34m to the tax bill for the on trade. We are concerned that women look set to be penalised by wine and spirit price increases across the board, simply because they make different choices about what to drink.”

With wine and spirits now accounting for 41% of the value of products sold in the on-trade, the only way the Chancellor can genuinely help pubs is to scrap the hated duty escalator for wine and spirits too.”

Introduced in 2008, the alcohol duty escalator increases taxation by 2% above retail price index inflation each year. The latest 5.3% tax increase announced in Budget 2013 added another 10p to a bottle of wine and 53p to a litre bottle of spirits. Since the introduction of the duty escalator, wine duty has increased by 50% and spirits duty by 44% - adding an additional 67p to a bottle of wine and £2.38 to a 70cl bottle of vodka in just five years.

 

- ENDS -

 

Notes to Editors

Impact on duty changed on taxation, based on same sales levels as 2012/13:

On trade

Product Change

Beer

-£44,290,864.80

Wine

£28,888,776.00

Spirits

£36,750,240.00

RTD

£3,916,980.00

Cider

£6,678,936.00

Sparkling/Champ

£2,109,852.00

Total:

£34,053,919.20

Off trade

Beer

-£32,951,318.40

Wine

£128,783,796.00

Spirits

£134,344,800.00

RTD

£4,323,060.00

Cider

£11,343,024.00

Sparkling/Champ

£12,454,272.00

£258,297,633.60

Based on Nielsen Sales Data

4.2% Average ABV of beer from BBPA

Tax rates from HMRC (2012/13)

Duty increases:

• Duty on a 750ml bottle of wine is now £2 up by 10p • Duty on a 70cl bottle of vodka at 37.5% is now £7.41 up by 37p • Duty on a litre bottle of vodka at 37.5% is now £10.58 up by 53p • Duty on a 70cl Bottle of gin at 40% is now £7.90 39p • Duty on a litre bottle of gin at 40% is now £11.29p up by 57p

Additional VAT

If this cost were to be passed on directly to the price the addition VAT would be:

Wine at 750ml – 2p

Vodka 37.5% at 70cl -7.4p

Vodka 37.5% at 1ltr – 10.6p

Gin 40% at 70cl - 7.8p

Gin 40% at 1ltr –  11p

Male / female drinks preferences:

Survey Source: YouGov Omnibus Panel Nov 2012, Wilson Drinks Report analysis Base size: 1,693 British adult drinkers

 

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 Aileen Keyes:

Tel:         +44 (0) 20 7089 3881

Mob:     +44 (0) 7504 498 656

Email:    [email protected]

Twitter @wstauk

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