‘Scrap crippling duty hikes’ industry pleads
As the UK Budget nears, the spirits industry is amplifying calls to scrap alcohol tax rises that would increase inflation.
Wine and spirits businesses are urging chancellor Rachel Reeves to rethink her plans to hike alcohol duty by RPI (retain price index, a UK measure of inflation) in November’s Budget.
The move could see alcohol duty increase by around 4.5% again, adding approximately 47p to the cost of a bottle of gin – markedly higher than the estimated 14p rise on a bottle of Prosecco and 16p for a bottle of red wine.
Trade body the Wine and Spirit Trade Association (WSTA) highlighted how wine and spirits businesses are already contending with two years of increased alcohol duty.
Plus, businesses have also been hit with the new glass tax due to the EPR (Extended Producer Responsibility) scheme.
On top of this, the rise in National Insurance, minimum wage hikes and reduced business rates relief have put added cost pressures on the sector.
Miles Beale, chief executive of the WSTA, said: “We are calling on Rachel Reeves to stop pouring away Treasury funds and scrap crippling duty hikes. Alcohol sales have been in steady decline since 2023, following the largest alcohol tax hike for 50 years.
“Instead of bringing in more cash to plug the black hole in public finances the government is reducing tax take and fuelling inflation, pushing up prices by a pound or more in a little over a year for wine and spirit consumers.
“National Insurance and minimum wage hikes as well as reduced business rates relief are adding to the red tape which is stifling British business and further tax rises would be the final nail in the coffin for many businesses that are struggling to stay afloat.
“The only way to break the cycle of tax duty increases penalising cash-strapped consumers, depleting Treasury funds and fuelling inflation is to freeze excise duty on wines and spirits at the November Budget.”
Earlier this year, data showed the UK Treasury has lost £500,000 (US$607,000) a day in revenue since the double-digit hike on spirits tax in the UK.
In addition, the UK hospitality industry estimates 111,000 jobs will have been lost by the time the Budget arrives on 26 November.
In July, the Office for National Statistics (ONS) revealed 84,000 hospitality jobs had already been lost since the October 2024 Budget.
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