WSTA: ‘overwhelming support’ for six-month alcohol duty cut

A survey by the Wine and Spirit Trade Association (WSTA) has shown “overwhelming support” for a six-month freeze on alcohol duty in the UK, while 84% of respondents also backed a halt on new laws amid the pandemic.

The WSTA survey showed “overwhelming support” for a six-month suspension to alcohol duty

Trade body the WSTA surveyed its members to find out what key messages it can deliver to the UK government to support the industry during the covid-19 crisis.

Nearly 95% of companies who participated agreed with the WSTA’s recommendation that the government should suspend excise duty for at least six months.

Last month, chancellor Rishi Sunak cancelled the planned duty increase for spirits in the UK budget and delivered a tax freeze on wine, beer and cider in the UK.

According to the WSTA, many businesses received their first duty bills last week (25 March) and were unable to pay, while some have been granted a deferment by HMRC for three months.

However, the WSTA is calling for this deferral to be changed to a duty suspension, allowing companies to hold on to vital funds to keep them afloat amid the pandemic.

The trade group said alcohol duty is “perhaps the biggest immediate challenge facing small on-trade businesses and suppliers”.

The WSTA also stressed there is a “real threat” that hospitality businesses will not survive, as on-trade venues were ordered to close with some companies changing to takeaway outlets.

‘Financial pressure’

Miles Beale, chief executive of the WSTA, said: “Excise duty reliefs continue to be the most common suggestion of a way that government can make a real difference to the sector.

“Our members’ survey showed overwhelming support for a six-month suspension to alcohol duty. Government has made it clear that there is no quick fix to the coronavirus crisis and has warned that it could be six months before life in the UK returns to normal.

“With many businesses facing duty bills again in three months’ time, the wine and spirit trade is likely to find itself under even greater financial pressure than they were at the beginning of the outbreak.”

In addition, Beale said the group’s members highlighted the “key concern” that “government-backed loans would take time and would risk leaving businesses drowning in debt at the end of the lockdown period”. He added that the pandemic would hit “cash-strapped” SMEs the hardest.

The WSTA is urging the government to immediately “look again” at how its support is being accessed.

Beale said: “Exemption from business rates should be extended immediately to those companies servicing the on-trade, which are just as much a part of the embattled hospitality sector. It’s either that or risk having pubs and bars reopen with no one to supply them.”

The WSTA survey also found that 84% of participants welcomed the WSTA’s advice to government to freeze all new legislation, including the proposed bottle deposit scheme and import certificates for wine from the European Union.