WSTA lobbies against UK’s ‘grossly unfair’ alcohol tax

14th September, 2018 by Melita Kiely

The Wine and Spirit Trade Association (WSTA) is asking its members and the public to lobby MPs over the UK’s “grossly unfair” alcohol taxes in fresh calls to freeze duty on wine and spirits.

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The WSTA says the UK’s alcohol tax policy is “grossly unfair”

A study conducted on behalf of the WSTA by independent financial experts found that a freeze to alcohol duty “represents a favourable outcome for the UK economy”.

UK chancellor of the exchequer Philip Hammond intends to increase taxes on wine and spirits by 3.4% – in line with inflation – in the next Budget, which the WSTA argues would “undermine an industry already facing a tough trading landscape following Brexit’s impact on the pound and rising inflation”.

As a result, the WSTA is urging the chancellor to freeze alcohol duty again in this year’s autumn Budget, like last year, which generated an additional £67 million for the Treasury in four months, according to Her Majesty’s Revenue & Customs (HMRC).

In July, members of the spirits industry said unfreezing alcohol duty in the UK would be “counter-productive” and “regressive”, as reports suggested the government could increase taxes to fund the NHS.

However, the WSTA said the chancellor claims duty freezes on alcohol “have come at a significant cost to the exchequer in lost revenues”.

Miles Beale, chief executive of the WSTA, said: “The chancellor got it spot on last year and froze duty, which we know increased revenue for the Treasury.

“UK consumers already pay some of the highest alcohol prices in Europe and it makes no sense to hit wine and spirit businesses, pubs and consumers with a duty rise.

“The reality is that freezing alcohol duty is a win/win/win – more money for the Treasury, support for British business, pubs and the cash-strapped consumer.

“Any rise in duty would be particularly harmful for importers and small businesses, who are acutely exposed to the risks of leaving the European Union.

“With Brexit fast approaching duty is one decision which is entirely in the government’s hands. Any rise would send the wrong signal, undermining UK business and consumer confidence.

“We are asking the chancellor for a fair freeze for all.”

The WSTA is enabling consumers to join the conversation on social media using the hashtag #fairfreezeforall.

Karen Betts, chief executive of the Scotch Whisky Association, has also called for more government support for Scotch this week, after a poll showed 71% of Scots believed the tax on Scotch whisky in the UK should be at least as competitive as European taxes on food and drink products.

As such, the SWA is also urging the chancellor to continue to freeze duty on spirits in this year’s Budget.

Betts said: “The Scotch whisky industry is working hard to boost our exports and improve trading conditions for Scotch all over the world. As we do so, we are calling on the government to recognise the contribution we make to the UK’s balance of trade in goods and back us at home.
“It is inconceivable France would hamstring its wine industry through heavy taxation. Yet, despite Scotch whisky generating billions in revenue for the economy, employing thousands of people, and attracting millions of tourists every year, it remains among the most taxed food and drink products in Europe.
“That is why we are calling on the chancellor to continue to freeze duty on spirits in this year’s Budget. The evidence shows that a continued freeze would not only deliver greater revenue for the Treasury, but also help to support an industry that has invested more than £500m in capital projects over the last five years.”

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