WSTA Logo

WSTA calls for the Chancellor to ‘make the cut’ and help save British pubs

The Wine and Spirit Trade Association is urging the Chancellor to give UK pubs a much needed boost by cutting wine and spirits duty by 2%. It claims that the Government previously focusing only on beer tax cuts to support pubs is a job half done as Brits are broadening their horizons when it comes to their favourite pub tipple and buying more wine and spirits at the bar than ever before.

Wine and spirit sales in UK pubs now accounts for over one third of the takings, worth £5.7billion last year, providing vital cash flow to the pub industry. New research by the WSTA show that 36% of the value of alcohol sold in pubs is now wines and spirits and that a 2% duty cut would provide a boost worth £31m to the industry, the equivalent of up to £594 for every landlord compared to an inflationary rise.

The WSTA have calculated that the excise duty bill for pubs now stands at approximately £1.9bn with a third of this, over £600m, coming from wines and spirits.

 

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

“While the Government has focused on beer cuts previously to support British pubs, the reality is that this is only a job half done. Wine and spirits are ever more important to the British Pub and the Chancellor can do his bit to support them and landlords by cutting wine and spirits duty by 2%

“British pubs represent the heart and soul of a community as well as being a significant employer in the UK supporting 577,000 workforce.  While we are seeing 23 pubs closing a week we cannot stress how crucial it is for government to recognise how important the UK wine and spirit sector is to jobs, communities and the economy.

But with higher inflation, the impact of the devaluation of the pound and the potential for duty increases, the pubs industry faces a potential triple whammy that will be devastating for the trade in 2017. Our new economic report shows that a 2% cut would boost the wine and spirits industry economic contribution by £2.9bn and also boost Treasury revenues by £368m. There is no better time for the Government to support British pubs and “make the cut” to wine and spirits duty”

In the last year 125million bottles of wine were sold in UK pubs and 49 million bottles of spirits were drunk, worth the equivalent of £110,000 to each UK pub (£70k from spirits; £40k from wine).

Since 2012 the value of wine and spirits sold in the pub has increased by £549m. £293m of that comes from sales in the past 12 months alone and represents +11% increase in sales since 2012 and +5% in the last year.

This is partly due to the increasing popularity of drinks like sparkling wine and the gin.

Gin sales in our pubs, bars and restaurants have grown more than any other spirit sold  in the 12 months (to 1/10/16) up +19%, on the same period last year, worth £619m.

Wine is now the nation’s most popular alcoholic drink. Sparkling wine sold the equivalent of over 16 million bottles, worth £768 million, in the on trade in the 12 weeks (to 1/10/16) a whopping +37% on the same period last year.

The latest CGA research shows that 2,428 pubs closed in the UK between 2014 and 2016 and were not replaced by new openings – this works out at 23 pubs closing a week.

A modest 2% cut to wine and spirits in the March Budget would be worth £594 for every UK publican. This would pay for the Landlord’s personal licence (the average cost is around £300) and still have money left over to pay for the pub football team’s strip.

And it’s not just the publicans who would benefit from a windfall, a 2% cut to wine and spirit duty at the next Budget would boost the Chancellor’s coffers by a further £368m as the industry grows and revenues increase according to independent forecasters EY.

These calculations are backed up by a recent duty cut success story. 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.

To find out more about the WSTA 2017 Budget Submission click go to: http://bit.ly/2017Budgetsub

#MakeTheCut

ENDS

Notes to editors:


 Wine and spirits duty facts


- Wine businesses and consumers pay £4bn in duty and spirits businesses and consumers a further £3.2bn.
- The duty on a bottle of wine is £2.08, meaning that 55% of the cost of the average bottle in shops and super markets is taken up in tax and VAT.
- The duty on a 70cl bottle of spirits is £7.26, meaning that 76% of the cost of the average bottle of spirits in shops and supermarkets is taken up by duty and VAT.
- Duty rates for wine have increased by 56% since 2007 and spirits duty rates have increased by 41%
- Compared to an inflationary rise of 3%, a 2% cut in duty would be worth 10p for a bottle of wine, 13p for a bottle of sparkling wine and 55p for a litre of spirits
- UK businesses and consumers pay the 4th highest duty rate for spirits in the EU accounting for a quarter of all Spirits Duties (27.29%).
- UK businesses and consumers pay the 3rd highest duty rate for wine in the EU accounting for 68.4% of all duties collected by member states.

- Wine sales in pubs have grown by £52m in last 3 years.

- Since 2012, spirits have added £634m (+21% or a fifth) in value sales to pubs of which £271m (+8%) was sold in the last year. These growth rates far exceed any other category with Beer up +1%; Cider - +2% since 2015.


The EY modelling revealed that 2% cut would:

 ·         Increase overall economic activity in the wine and spirit sector by £2.9bn (+6%).
·         Increase overall revenues to the Treasury by a projected £368m (+2%).
·         Increase industry contributions to the UK’s GDP by a projected £1.6bn (+6%).
 

The WSTA is the UK organisation for the wine and spirit industry, representing over 300 companies producing, importing, transporting and selling wine and spirits. The WSTA works with its members to promote responsible production, marketing and sale of alcohol.

 

 2014-09-8-Life-of-Pix-free-stock-photos-restaurant-table-for-two-soho-new-york.jpg

 

WSTA calls on Chancellor to cut wine and spirits duty by 2% after PM’s plea to build a stronger economy and empower UK business

Independent economic modelling shows cut could boost wine and spirits industry by £2.9bn and Treasury revenues by £368m

Cut would save UK’s 38m wine drinkers 10p per bottle and 31m spirits drinkers 55p per litre

Call comes as wine trade is hit with Brexit cost of £594m

 

Theresa May this week called for Brits to face "no new barriers to living and doing business" and let out a rallying cry for a "better deal for ordinary working people at home."

The PM set out a 12-point plan for leaving the EU vowing to “take this opportunity to make Britain stronger”.

 

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

“There is one way Theresa May’s Government can ‘empower’ British business almost immediately, and that is to support our industry with  a 2% cut in wine and spirits duty at the next Budget. This would strengthen British business, give consumers a better deal and benefit the Chancellor too.

Evidence shows that a moderate cut in duty would give the industry a £2.9bn boost but also help relieve the pressure on consumers that are facing very high duty rates and the growing pressure of rising inflation. A growing industry and a fairer tax regime is proven to increase revenues to the Treasury too.

At a time when inflation is rising, and with the added costs and uncertainty that Brexit brings, there has never been a better time for the Chancellor to act positively by addressing the wine and spirit industry’s historically high duty levels and harnessing its potential.

The Government’s Budget will have a profound impact. Not just on the wine and spirits industry but on its workers and consumers who enjoy its quality products. This is why our message to the Chancellor is clear cut. It is time for him to be bold, to back British business and to make the cut in wine and spirits duty.”

 

Independent forecasters have predicted that this modest drop would allow the wine and spirit sector to contribute a further £2.9bn in economic activity to a record breaking level of £52.6bn.

The cut would also help to boost the Chancellor’s coffers by a further £368m as the industry grows and revenues increase according to EY. These calculations are backed up by a recent duty cut success story. 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.

The UK’s wine industry is at the centre of the global wine trade and incudes a sparkling English wine sector that is already exporting to 27 different countries.

The UK spirits sector is one of Britain’s most valuable exports with a booming British Gin industry which topped £1bn of UK sales for the first time last year.

Overall the wine and spirit industry supports over 550,000 jobs across the U.K. in vineyards, distilleries, bottling plants and logistics companies.

The call comes as UK wine businesses particularly are reeling from the triple impact of historically high duty rates, higher inflation and the devaluation of the pound. This will hit the wine industry with at least £594m in further costs as the UK currency continues to slide against key markets such as the US Dollar, the Euro and Australia Dollar.

Last year the WSTA warned that currency fluctuations could lead to wine prices going up by an average 29p per bottle. Meaning that any increase in duty, on top of the post-Brexit Sterling devaluation, could have dire consequences on Britain’s wine trade.

The cut would also come as welcome relief to the UK’s 38m wine consumers and 31m spirits consumers as it would knock off 10p on a bottle of wine and 55p from a litre of spirits compared to an inflationary rise, expected to be at around 3%. Consumers are already paying a staggering 55% of the average bottle of wine on duty and VAT and 76% for the average bottle of spirits and anger at this showed in recent polling where 62% of the public said wine duty was too high and 70% said that spirits duty was too high.

To find out more about the WSTA 2017 Budget Submission click go to: http://bit.ly/2017Budgetsub

Ends

 

Notes to editors:


 Wine and spirits duty facts
- Wine businesses and consumers pay £4bn in duty and duty and spirits businesses and consumers a further £3.2bn.
- The duty on a bottle of wine is £2.08, meaning that 55% of the cost of the average bottle in shops and super markets is taken up in tax and VAT.
- The duty on a 70cl bottle of spirits is £7.26, meaning that 76% of the cost of the average bottle of spirits in shops and supermarkets is taken up by duty and VAT.
- Duty rates for wine have increased by 56% since 2007 and spirits duty rates have increased by 41%
- Compared to an inflationary rise of 3%, a 2% cut in duty would be worth 10p for a bottle of wine, 13p for a bottle of sparkling wine and 55p for a litre of spirits
- UK businesses and consumers pay the 4th highest duty rate for spirits in the EU accounting for a quarter of all Spirits Duties (26.15%), 39.26%.
-UK businesses and consumers pay the 2nd highest duty rate for spirits in the EU accounting for two thirds of all duties collected by member states

The EY modelling revealed that 2% cut would:

·         Increase overall economic activity in the wine and spirit sector by £2.9bn (+6%).
·         Increase overall revenues to the Treasury by a projected £368m (+2%).
·         Increase industry contributions to the UK’s GDP by a projected £1.6bn (+6%).
 

The WSTA is the UK organisation for the wine and spirit industry, representing over 300 companies producing, importing, transporting and selling wine and spirits. The WSTA works with its members to promote responsible production, marketing and sale of alcohol.

If you would like anymore information on this then please contact:

 

Lucy Panton - [email protected]

Tel: +44 (0) 207 0893875

Mobile: + 44 (0) 7776422656

Harriet Talbot [email protected]

Tel +44 (0) 207 0893875

Mobile +44 (0) 7587290720

Subcategories

Twitter @wstauk

RT @optawine: 315 - the total number of on line UK distilleries. Read more here: https://t.co/KN28q9XJu9 @WSTA_Miles @wstauk


British Gin in boom and more English and Welsh whisky on the horizon. It’s an exciting time for the UK spirits indu… https://t.co/BphSYH9ee0


RT @HarpersWine: UK distillery number doubles in five years https://t.co/l3oyggKKtb @wstauk @WSTA_Miles https://t.co/g5ZRCkWJki

Connect with us