More than half UK Christmas alcohol spend is tax

19th December, 2016 by Annie Hayes

As festive preparations get well under way, the Wine and Spirit Trade Association (WSTA) has revealed that tax accounts for 51% of the total cost of an average family’s Christmas alcohol shop.

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Tax accounts for 51% of the total cost of an average family’s Christmas alcohol shop

An average seasonal shop – consisting of 5 bottles of wine, 2 bottles of Champagne, 2 bottles of sparkling wine, 3 bottles of spirits, 2 bottles of Port, 24 cans of beer and 12 ciders – costs a UK family, on average, £171.66. Of this, £88.19 goes directly to the Treasury.

Across the pond, however, French consumers pay just 32% tax on the same goods. The total cost of the equivalent shop in France would be £136.89, with tax coming in at £43.52.

The difference between the two baskets can entirely be accounted for by alcohol duty, with the difference in duty alone – not including VAT – at £38.87.

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

“Earlier this year we communicated the impact that the fall in sterling’s value will have on wine prices. Thus far businesses have been able to shoulder the burden by absorbing the extra costs.

“This will be welcome for consumers, particularly in the run up to Christmas. However, in the New Year, we should be under no illusion that prices will rise. In addition, with inflation levels rising to 1.2% in November, spirits prices will increase and wine will be hit again.

“And that is also why it’s vital there is no increase to duty on wine and spirits at the next Budget in March. The Chancellor can provide welcome relief for businesses that have some extremely testing times ahead.”

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