WSTA makes further calls for duty freeze

By Michelle Perrett

Published: 19 October, 2021

The Wine and Spirit Trade Association (WSTA) is again calling on the Government to freeze alcohol duty as consumers face record high prices over the festive period.

The trade association said that UK consumers are bracing themselves for further hikes on their favourite booze this Christmas, as the Chancellor is set to raise alcohol duty by RPI – which is currently at 4.8%.

For every bottle of average priced spirit (at 40% ABV) purchased, 73% or £10.37 goes straight to the Treasury on duty plus VAT. For an average priced bottle of still wine 55% or £3.20, goes on duty and VAT.

The WSTA highlighted the duty differential with Spain where their shoppers pay 21% VAT on alcohol, but don’t have to pay any duty on wine, sparkling wine, champagne, sherry or cider. The Spanish do pay duty on spirits, but it’s less than half the amount paid by British spirit drinkers.

The WSTA compared a typical festive season shop at a supermarket in the UK with the same or similar brands bought at a Spanish supermarket. The UK shop cost £233.58 compared to just £165 in Spain.

The online shop used in this comparison consisted 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 six bottles of 75cl ciders.

The WSTA is calling on the Chancellor to freeze duty at the Budget next Wednesday, to avoid heaping even higher prices on British consumers as well as putting added pressure on the UK wine and spirit sector.

Rising costs as a result of the impact of Covid-19, closure of the hospitality sector, Brexit red tape, HGV driver and other staff shortages has meant that businesses are facing record high prices, which are inevitably being passed on to increasingly squeezed consumers.

“Comparing the wine and spirit tax regime in the UK to that in Spain puts the UK’s excessively high rate of excise duty firmly in the spotlight," said Miles Beale, chief executive of the WSTA.

“UK consumers are already bracing themselves for shortages and price hikes this Christmas. The Chancellor can ease the financial pain for everyone who is hoping to make up for all the missed family gatherings and last year’s cancelled Christmas by not raising alcohol duty. Freezing wine and spirit duty at the Budget will also give British businesses a much-needed break, which will be vital for our sector’s the road to recovery.”

Printer friendly version