Gin lovers to be hit by major price hike

Consumers already pay £3.3bn in spirits duty, but a predicted rise in inflation of 34p a litre could hit them with a bill of at least £60m.

Government policy dictates that alcohol duty rises are pegged to inflation, which means if inflation increases by a predicted 3%, the price of spirits will also rise.

The WSTA warned last week that, following the fall in the value of the pound, the average bottle of wine coming from the EU would rise by 29p a litre. Additional costs will by incurred if inflation rises.

Huge tax on spirits​

Almost three quarters (74%) of the price of a bottle of spirits is tax, but this will rise if inflation goes up as much as anticipated, the WSTA said.

Spirits firms have criticised the planned hikes, calling them counterproductive, as evidence shows that following a freeze in wine duty in 2015, duty income increased on the previous year by 3.6% to £139m.

Following a cut in spirits duty in 2015, income also increased by £125m (4.1%).

UK wine and spirits contributed £15.6bn to the Treasury in 2015 and created 588,000 jobs directly and indirectly.

Duty is already ‘staggering’​

WSTA chief executive Miles Beale said: “Drinkers of gin and other spirits are already paying a staggering amount in duty. Unless the Government reviews this policy, the rise in inflation will slap a further £60m on spirits consumers.

“And wine consumers could face a double blow if potential duty rises of £120m are added to the impact of the devaluation of the pound which, together, could cost over £400m this year alone.”

The UK wine and spirits trade is worth almost £40bn and makes a significant contribution to the UK economy and supports almost 600,000 jobs, added Beale.

“These British jobs will be put at risk by damaging tax rises, unless the Government re-examines its excise duty policy.”