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UK spirits tax revenue tops beer for first time

Spirits sales brought more money into the UK Treasury than beer in 2016, marking an industry first, according to the Wine and Spirit Trade Association (WSTA).

The UK Treasury earned an additional £225m in revenue from spirits in 2016

The Treasury earned an additional £225millon in revenue from the sector last year, credited to a freeze in spirits duty that was implemented in the 2016 Budget.

Total spirits duty hit almost £3.38bn, while beer duty contributed £3.32bn, and wine brought in £4bn.

The gin category witnessed the fastest growth rate according to the WSTA Market Report, with sales up 12% on the previous year.

The WSTA raised concerns that spirits and duty revenue “could falter” in 2017 after a 3.9% ruse on alcohol duty was featured in the March Budget, adding an additional 30p per bottle.

“The WSTA dubbed 2016 the year of gin and the gin boom has had a large part to play in the windfall now being enjoyed by the Treasury,” said WSTA chief executive Miles Beal.

“The 7% increase on revenue takings came as a result of the Chancellor freezing spirit duty in 2016 and allowing the industry to grow and invest.

“It proves the point that cutting or freezing spirits duty brings rewards, which is why the inflation busting rise in duty this year was such a disappointment and threatens the industry’s ability to invest, grow and export.”

The UK has the 4th highest spirits duty rates in the EU, and pays more than Germany, France, Poland, Italy and Spain combined – with 77% of a bottle of spirits accounted for by tax.

According to the WSTA, of an “average priced” 700ml bottle at 40% abv, £10.33 goes towards duty.

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