MacFarlane urges duty fraud action

Stuart MacFarlane is right to challenge the government's reliance on excise duty. The industry must not shrink from reminding government that at a time when some business sectors are receiving state help we have been punished with successive duty increases.

The 8% increase in duty (4% for spirits) last November was particularly damaging and came at the worst possible time for the industry. With VAT about to be restored to its standard 17.5% rate at the end of next month, the WSTA is strongly urging the Treasury to reverse the tax hike.

According to the Treasury, the tax increase was introduced to ensure that the impact of the VAT change was broadly cost-neutral for alcohol. The WSTA has argued consistently that the tax increase was not, in fact, cost neutral for more than 90% of the wines sold in the UK off-trade.

Coming on top of the excessive duty increase in the March 2008 Budget, the tax rise exacerbated the impact on the industry of reduced consumer spending, the adverse exchange rate and increased cost of production.

Since March 2008, duty on wine and spirits has increased by about 20% and 16% respectively, contributing to job losses and cutbacks in investment and making the UK an unstable and unattractive market.

It is time to reverse last November's tax increase and stop relying on excise duty as an endless source of revenue.
Jeremy Beadles, chief executive, WSTA

[First published on the letters page of The Grocer, 28/11/09]