The price consumers pay for spirits will soar if the government goes ahead with plans to introduce excise duty strip stamps, retailers have warned.
Brand owners also fear that marketing budgets will be slashed as the cost of attaching strip stamps and managing the paper work puts pressure on
margins.
Cheap supermarket deals on spirits could be a thing of the past as shoppers end up footing the bill for the changes, which have been estimated at £280m for the Scotch whisky industry alone.
Andy Gale, category technical manager for beers, wines and spirits at Tesco, said: “The margins on spirits have got smaller as they have got cheaper for our customers. If there is an additional cost we will have to pass that on.”
Marcel Hayden, Somerfield’s head of category buying, said: “It will be the consumer who has to pay in the end.”
The industry has been reeling since Gordon Brown renewed proposals to bring in strip stamps if an alternative measure for clamping down on fraud fails to emerge (The Grocer, December 13, 2003, p 5).
Glen Gribbon, brands director for Whyte and Mackay, said: “The £37m cash flow we will need will force us to make difficult pricing decisions. It will be difficult to develop brands and maintain brand investment.”
The government claims the stamps, designed to prove that duty has been paid, will help combat the £600m black market in untaxed spirits.
However, the trade says the figure is much lower, and is demanding an independent audit. Opposition MPs say Whitehall’s figures would mean 12 containers of 200,000 bottles of spirit disappear daily.
Rosie Davenport
Brand owners also fear that marketing budgets will be slashed as the cost of attaching strip stamps and managing the paper work puts pressure on
margins.
Cheap supermarket deals on spirits could be a thing of the past as shoppers end up footing the bill for the changes, which have been estimated at £280m for the Scotch whisky industry alone.
Andy Gale, category technical manager for beers, wines and spirits at Tesco, said: “The margins on spirits have got smaller as they have got cheaper for our customers. If there is an additional cost we will have to pass that on.”
Marcel Hayden, Somerfield’s head of category buying, said: “It will be the consumer who has to pay in the end.”
The industry has been reeling since Gordon Brown renewed proposals to bring in strip stamps if an alternative measure for clamping down on fraud fails to emerge (The Grocer, December 13, 2003, p 5).
Glen Gribbon, brands director for Whyte and Mackay, said: “The £37m cash flow we will need will force us to make difficult pricing decisions. It will be difficult to develop brands and maintain brand investment.”
The government claims the stamps, designed to prove that duty has been paid, will help combat the £600m black market in untaxed spirits.
However, the trade says the figure is much lower, and is demanding an independent audit. Opposition MPs say Whitehall’s figures would mean 12 containers of 200,000 bottles of spirit disappear daily.
Rosie Davenport
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