Successive duty increases on wine have stripped value from the sector, squeezing supplier margins to breaking point and reducing quality and choice for the consumer, according to the industry’s trade group.
In its pre-Budget submission
to the Treasury, the Wine and Spirit Association has called for a freeze or reduction in duty for several years.
The WSA said previous hikes had brought growth to a standstill in the UK, reducing investment in brands and cutting back choice for the consumer as a result of consolidation. WSA director Quentin Rappoport said: “Owing to consumer resistance to price points, duty increases often are not passed on to consumers, which damages trade by squeezing margins and reducing investment in brands. This is now evident from sales growth, which has slowed dramatically.”
Proposals to ask drinks companies and retailers to pay into central and local funds to help tackle alcohol abuse would be ineffective in changing drinking culture, the WSA said.
“It is apparent that what is being proposed is a levy - a hypothecated stealth tax,” added Rappoport. Increases in duty would hit sensible drinkers harder than binge drinkers, setting back the government’s aim of encouraging a more Mediterranean drinking culture.
Claire Hu