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Rising spirits and wine sales boost on-trade
Sales of spirits and wine have increased in the UK on-trade, generating an estimated revenue of £280 million in the last year, new data has revealed.
CGA Strategy estimates that spirits and wine generated an estimated £230m in revenue for the on-trade last year
Figures from CGA Strategy show that spirits currently account for 22% of drinks sold in the on-trade, while the agency predicts that this figure will rise to 24% by 2018.
Meanwhile wine accounts for 18% and beer and cider contribute 40.2% to on-trade drinks revenue. However, CGA predicts that beer and lager sales are set to decrease from around 50% to 47% over the next four years, further reinforcing the prediction that consumers will be turning to spirits and wine.
The Wine and Spirits Trade Association (WSTA) is using this data to strengthen its calls for the Chancellor of the Exchequer to scrap the UK’s alcohol tax escalator, which has increased duty an additional 2% above the rate of inflation every since its introduction in 2008.
In 2013, Chancellor George Osborne used the Budget to announce the end of the alcohol duty escalator for beer in a bid to help save the British pub.
However, the escalator was retained for wine and spirits – a move the WSTA claims cost the on-trade paid extra £34m in tax during the year.
The organisation has joined the Scotch whisky Association (SWA) and the Taxpayers’ Alliance in forming the Call Time on Duty Campaign, urging the UK Government to stop the automatic alcohol tax escalator and freeze alcohol duty during tomorrow’s Budget statement.
Miles Beale, chief executive of the WSTA, said: “These figures show that pubs, bars and restaurants are increasingly reliant on wine and spirit sales to bring in revenue.
“We are calling on the Chancellor to help save the British pub by scrapping his inflation-busting alcohol super tax at the 2014 Budget. This will also be welcomed by responsible drinkers in hard-pressed times.”
The WSTA further claims that 79% of an average priced spirits bottle is accounted for by tax, while UK consumers pay 38.8% of all alcohol duty collected in the EU.
George Osborne will announce his Budget to Parliament tomorrow, 19 March.