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WSTA warns against 5% spirits duty hike

The Wine and Spirit Trade Association (WSTA) is urging the UK government to freeze alcohol duty in the Budget next week.

Alcohol duty
The WSTA is urging the UK government to freeze spirits duty in the autumn Budget

UK chancellor Rishi Sunak will outline the next Budget on 27 October.

The WSTA said Sunak is set to raise alcohol duty by retail price index (RPI), which is currently 4.8%.

As it stands, for every bottle of average-priced spirit bottled at 40% ABV, 73% of the cost is duty plus VAT – equating to £10.37 (around US$14.30) that goes straight to the treasury.

By comparison, in Spain, consumers pay 21% VAT on alcohol, but pay no duty on wine, sparling wine, Champagne, Sherry or cider. Duty is paid on spirits, but this is less than half of what British spirits drinkers fork out.

Furthermore, the WSTA is reminding the chancellor of the multiple challenges already impacting the drinks trade, resulting in higher costs for the industry that are already being passed onto the ‘increasingly squeezed’ consumer.

These challenges include: rising costs because of the impact of Covid-19; the closure of the hospitality sector; Brexit red tape; and HGV driver and other staff shortages.

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

“UK consumers are already bracing themselves for shortages and price hikes this Christmas.

“The chancellor can ease the financial pain for everyone who is hoping to make up for all the missed family gatherings and last year’s cancelled Christmas by not raising alcohol duty.

“Freezing wine and spirit duty at the Budget will also give British businesses a much-needed break, which will be vital for our sector’s road to recovery.”

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