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Tax accounts for 50% of consumers' alcohol shop this Christmas

Published:  19 December, 2016

Baskets and trolleys are heavy at this time of year with alcohol for the festive season, but they would feel considerably lighter if it wasn't for the high rate of duty in the UK.

According to figures released today, tax accounts for over 50% of the total cost of the average family's festive alcohol shop.

This is considerably higher than other European countries, such as France where consumers will only pay 32% tax on the same goods at French supermarket checkouts.

The Wine and Spirit Trade Association (WSTA), has highlighted the impact that rising tax could have on shopping habits as consumers stock up for the final festive week.

The WSTA revealed that an average festive season shop consisting of five bottles of wine, two bottles of Champagne, two bottles of sparkling wine, three bottles of spirits, two bottles of port, 24 cans of beer and 12 ciders costs a UK family £171.66 - £88.19 of which goes directly to the treasury.

The cost of the equivalent shop in France would be £136.89 - £34.77 cheaper than the UK.

Miles Beale, chief executive of the WSTA, said the rising tax burden on alcohol as well as the effect if a weaker, post-Brexit pound is another reason why there should be no duty rise at the next budget review.

He said: "Earlier this year we communicated the impact that the fall in sterling's value will have on wine prices. Thus far, businesses have been able to shoulder the burden by absorbing the extra costs.

"This will be welcome for consumers, particularly in the run up to Christmas. However, in the New Year, we should be under no illusion that prices will rise. In addition, with inflation levels rising to 1.2% in November, spirits prices will increase and wine will be hit again.

"And that is also why it's vital there is no increase to duty on wine and spirits at the next Budget in March. The Chancellor can provide welcome relief for businesses that have some extremely testing times ahead."

Tax is considerably lower in France where tax (duty plus VAT) is just £43.52, which is £45 less that the UK (£88.19).

The difference between the two baskets can be accounted for entirely by alcohol duty, with the difference in duty alone (not including VAT) at £38.87.