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Wine and spirit windfall boosts Treasury by over £200 million


WINE AND SPIRIT WINDFALL BOOSTS TREASURY BY OVER £200 MILLION

The Wine and Spirit Trade Association calls for the Government to back our Great British distilleries andineyards.

                          

  • In just 9 months, following a cut to spirits and a freeze to wine duty, wine and spirits brought in an extra £210m to the Exchequer.

  • Wine duties are now on course to reach over £4bn in one year for the first time and spirits are on course to reach £3.1bn.

  • Industry asks for 2% cut in the March Budget to rebuild confidence, create jobs and grow exports.

 

English wine and British gin teamed up with WSTA chiefs to petition the Treasury for a 2% cut this week.

Armed with the news that Treasury coffers were boosted by almost £200m in nine months, the united band of wine and spirit bosses put forward their case for a fairer deal for the industry.

The latest figures from HMRC show that Exchequer revenue from wine, between April and December, jumped 4%, growing by a staggering £114m compared to an increase of just £59m in 2014.

Spirits revenue in this period also went up 4%, or £96m, compared to a decline in revenue of £11m in 2014.

At this rate wine duties are on course to reach a record breaking £4bn in a single year for the first time and spirit duties will hit £3.1bn for the first time.

While the WSTA welcomed the cut in duty for spirits in last year’s budget it said more could be done to help create more jobs, encourage investment, expand exports and a secure a better deal for consumers.

WSTA Chairman Denis O’Flynn and WSTA Chief Executive Miles Beale were joined by English vineyard owner Mark Driver and gin distiller Helen Chesshire to meet Treasury Exchequer Secretary Damian Hinds MP on Thursday (3 February).

Mark and Helen are both shining examples of founders of start-up businesses which represent the best that Britain has to offer in the rapidly expanding production of wine and gin.

The team explained that duty on a bottle of wine is £2.05, meaning that 55% of the average priced bottle goes on duty and VAT.

Sparkling wine, which makes up two thirds of all English wine production, takes an even bigger hit with duty 28% higher than still wine, adding up £2.63 per bottle.

The UK has the second highest wine duty in the EU, beaten only by our neighbours Ireland.

On average, when you buy a 70cl bottle of spirits, 74% or £7.26 of your money goes on duty and VAT.

The UK has the fourth highest spirits duty in the EU at £7.74 per litre, even though more jobs depend on spirits here than in any other member state.

Chief Executive of the Wine and Spirit Trade Association, Miles Beale said:  “The wine and spirit industry has faced difficult trading conditions over the past few years, seeing sales and revenues decline, which has impacted on its ability to create jobs and to invest.

“Our ask of the Chancellor in the 2016 Budget is therefore very simple. To build on his admirable decisions at the last two March budgets, and to move away from some of the highest excise duty rates in the EU.

“We are calling on the Government to cut excise duty on wine and spirit by a modest 2%.

“Evidence now clearly shows that these cuts are not only popular, but have led to greater revenue for the Exchequer, more jobs, greater investment by the industry and a better deal for consumers.”

Denis O’Flynn, Chairman of the WSTA and MD of Pernod Ricard, said: “The UK’s wine and spirit industry as a whole supports nearly 600,000 jobs in the UK and contributes £45bn in economic activity.

“Further support for wine and spirits will bring more jobs, grow exports and allow our great British products to compete in the fiercely competitive global marketplace.”

Helen Chesshire set up Brighton Gin in 2014. The company started small but is now experiencing rapid growth and Helen is keen to expand.

She said: “British gin is going down a storm across the world. But for small businesses like ours excise duty rates are a drag on growth. They affect our cashflow, tie up working capital and stop us recruiting and expanding our business. What I really want is more employees, bigger premises, to crack a couple of export markets - and a forklift truck!”

Mark Driver, owner of the UK’s largest single site vineyard, Rathfinny in Sussex, is on target to produce one million bottles of English sparkling wine by 2020.

Mark said: “English wine is no longer seen as artisanal product and is competing with the best in the world.  A 2% cut - or dropping duty on sparkling wine to the level of still wine - would lead to a fairer playing field and incentivise investment in modern, high value agriculture. This would allow us to compete globally - and that's what English wine really needs to encourage a golden future.”

The Wine and Spirits Trade Association’s Budget Submission 2015 ‘Supporting a Great British Industry’ can be found here: http://wsta.co.uk/images/budget/2016WSTABudgetsub.pdf

Notes to editors:

Beer and Cider revenues were down following the 9 month period post Budget.

The WSTA is the UK organisation for the wine and spirit industry, representing 340 companies producing, importing, transporting and selling wine and spirits. The WSTA works with its members to promote responsible production, marketing and sale of alcohol.

For more information please contact Lucy Panton:

Tel: +44 (0) 207 0893875

Mobile: + 44 (0) 7776422656


Want to know more? Ask Ciaran Myles
Ciaran Myles

Ciaran Myles - Research & Insights Manager

Ciaran joined WSTA in October 2015. He is responsible for conducting market and consumer research, and providing insights and analysis of trends across all policy areas. He oversees the production of WSTA’s annual and quarterly reports as well as commissioning bespoke projects. He is responsible for the management of the Research & Insights Group.

Email: [email protected]
Telephone: 020 7089 3880

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