Anger as wine and spirits taxes rise

Published: 21 March, 2013

The wine and spirits industry have reacted with dismay that the Chancellor has scrapped the duty escalator for beer but...

The wine and spirits industry have reacted with dismay that the Chancellor has scrapped the duty escalator for beer but left it in place for wine and spirits.

While beer will enjoy 2% duty cut, wine and spirit duty will rise by 5.3% on Sunday. The increase will add 10p of duty to a bottle of wine and 53p to a litre bottle of spirits.

The latest rise means that consumers will have seen wine duty increase by 50% and spirits duty by 44% since the escalator was introduced in 2008, putting an additional 67p on a bottle of wine and £2.38 on a 70cl bottle of vodka.

The duty escalator will continue to see wine and spirits tax rise by 2% above inflation until 2015.

Spirits giant Diageo said that increasing duty on spirits while cutting it on beer punished the UK spirits industry for success. "Scotch is the UK's biggest food and drink export. This move risks that success," it said in a statement.

The Scotch Whisky Association said the move was "unfair, incomprehensible and undermines one of Britain's major industries in its home market."

WSTA chief executive Miles Beale said it made little sense to single out beer, particularly as legal precedent suggests the move could be against European trade rules.

"If this was designed as a measure to support pubs it seems misplaced: over 41% of drinks sold in pubs are wine and spirits, contributing £9.4 billion per year. The Chancellor's decision ignores the growing value of the English wine industry and the UK spirits industry, which accounts for 18% of all jobs in the EU spirits industry," he said.

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