Drinks industry leaders have called on the UK’s political parties to address “unfairly high” alcohol duty in their manifestos ahead of the upcoming election.
Beer, wine and spirit duties were “harmful to both British businesses and struggling consumers”, said Miles Beale, CEO of the Wine and Spirit Trade Association. If lowered, they could reduce pressure on industry and consumers, he claimed.
“The UK has some of the most excessive and unfairly high duty rates in the world,” said Beale.
“Between Brexit’s short-term impact on the pound, concerns about disruption to trade and rising inflation, wine and spirit businesses are already facing a tough trading landscape.
“Rebalancing the duty burden on a world-leading UK industry would support business growth and job creation, which would in turn bring more revenue to the exchequer.”
Brigid Simmonds, chief executive of the British Beer & Pub Association, agreed the general election presented an “opportunity” to create a fairer tax regime for brewers and retailers ahead of Brexit.
“In particular, there are opportunities for lower taxes on lower-strength beers, and with beer tax 13 times higher than in Germany overall, we will certainly be highlighting the pressing need to tackle high rates of beer duty,” she told The Grocer.
Chancellor Philip Hammond announced a 3.9% rise in alcohol duties in line with inflation with March’s Budget. Duty is currently charged on drinks over 1.2% abv, and is liable as soon as they are produced, escalating with higher abv liquids.
“It’s a cash cow for the government and it’s easy to justify it on health reasons” said Charles Simpson, owner of Simpsons Wine Estate.
“On a £6 bottle of wine, over 50% goes to the government - 20% VAT and roughly £2.16 in duty, a ridiculous amount of money.”
The present government had been “supportive” to British viticulture, he said, but more needed to be done to help businesses survive the current pressures.
“We were, as a business, very fortunate to receive a Defra grant to build part of our winery, so there is encouragement but you think they would try to be a bit more helpful in terms of duty,” he said.
The WSTA, which today announced its full manifesto ahead of the election (8 May), has also called on political parties to support the UK wine and spirit industry by assuring a “well-managed” Brexit, which would secure “frictionless, tariff-free trade” with Europe.
None of the political parties were available for comment.
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