The Independent Newspaper is reporting that the alcohol industry is calling for cut to punishing duty rates. The Wine and Spirit Trade Association (WSTA) has voiced concerns over the detrimental effects of last year’s significant increases in alcohol duty, highlighting the negative repercussions on UK businesses and the broader economy. These increases, described as the largest in nearly half a century, added 20% to the excise duty on the majority of wines and over 10% on full-strength spirits available in the UK market.
The industry witnessed a decline in sales volumes for wine and spirits, with spirits sales dropping by 7.1% and wine sales by 4.1% in the 12 weeks leading up to December compared with the previous year. This downturn has not only impacted businesses but has also contributed to inflation and led to a substantial decrease in excise duty receipts for the Exchequer, with the Treasury losing £436 million from wine and spirits between September and January, compared to the same period a year earlier. Including beer and cider, the total loss amounts to £600 million.
The association has indicated that price increases have already made their mark on consumers, with the average price of a bottle of red wine rising by 8% to £7.85, gin by 6% to £17.11, and fortified wine by 17% to £11.67. The introduction of a new, complex duty system next year is also anticipated to present significant challenges for the industry, complicating operations for businesses with extensive wine ranges.
