Duty raised from wine predicted to grow 54% by 2019

By Richard Siddle

Published: 06 December, 2013

Economic forecasts have been released this week that predict the total amount of money raised by duty on wine will increase by 54% over the next six years if the duty escalator remains in place.

The predictions, made by the independent body, OBR (the Office for Budget Responsibility), coincide with yesterday's Autumn Statement by the Chancellor, George Osborne, that gave no indication whether the annual duty escalator will be removed.

OBR's figures were seized on by industry analyst Tim Wilson of the Wilson Drinks Report who also predicted the total amount of money raised through alcohol duty, particularly on wine, would "significantly increase over the next few years despite an overall reduction in the total amount of alcohol being consumed in the UK".

Wilson points to OBR forecasts that set out the amount of money to be raised through duty between 2012/13 and 2018/19 are:

Beer / cider + 0%

Wines +54%

Spirits +31%

The OBR also expect wine volumes to increase 19%, spirits volumes to increase by 1% but beer volumes to fall back a further 15% over the same period.

Wilson said: "We expect that the Chancellor will continue to implement the duty escalator on wines and spirits over the remainder of this parliament, and beyond. The level of increase in the predicted total duty receipts is proof of this. Wine duty would need to increase by 5.1% each year on average to achieve the estimated level of duty receipts by 2018/19.

"Despite volumes of still wine being in steady decline at the moment, wine duty receipts are expected to increase by 54% between 2012/13 and 2018/19. This is because HM Treasury believes that economic growth will be accompanied by large increases in the sales of wine."

He added: "We have been saying for some time that the Chancellor will prioritise duty freezes on petrol over freezes on alcohol duty - today's announcement that the fuel duty has been frozen again demonstrates that any spare cash will be used to help car drivers, not drinkers, before the next election."

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