WSTA calls for two-year duty freeze

Alcohol sales in the UK declined following last year’s tax hike, which saw more than 10% duty increases for spirits and beer and at least a 20% increase in duty for most wine, according to the association.

The WSTA asserted this had resulted in a £1.3bn (10%) drop in revenue to the Exchequer, which equates to almost the same amount as the winter fuel allowance savings.

In a bid to help “plug the black hole in public finances” by boosting alcohol sales, the association has urged Chancellor Rachel Reeves to implement a freeze to alcohol duty for a minimum of two years as part of its Budget submission to the treasury earlier this month.

The WSTA also called for the Government to confirm and enact the end of the duty-stamp regime for spirits drinks ahead of the upcoming Budget, set to take place on Wednesday 30 October.

Difficult decisions 

WSTA chief executive Miles Beale said: “Last year’s damaging reforms to the alcohol excise duty system, including the largest single duty hike in almost 50 years, have hit businesses, consumers and the Government purse.

“The Prime Minister and Chancellor have been unequivocal in setting out the need to achieve economic growth and in signalling that the pressures on public expenditure mean difficult decisions will have to be taken at the Budget on 30 October. 

“But, for alcohol duty the decision need not be difficult. Increasing duty – which is the Government’s inherited policy - will serve only to reduce income to Government further at a time it can least afford it.”

The most pronounced decrease was for receipts from spirits, which plummeted by £757m, meanwhile receipts for wine, beer and cider were down by £238m, £320m and £24m respectively. 

Driving growth 

According to the latest figures from the Office for National Statistics (ONS) a 75cl bottle of red wine now costs £7.73, up from £7.20 in July last year, while a 70cl bottle of gin has increased from £15.98 to £17.24.

If duty rates continue to rise and sales continue to fall, the Government doesn’t just lose out on duty receipts, VAT receipts will be down too, the association warned.

Beale continued: “Freezing duty for at least two years and avoiding imposing damaging additional costs and red tape by maintaining the wine easement, will benefit businesses and consumers by driving growth and keeping prices stable while optimising Government income.

“In short, a freeze won’t cost Government anything, but it will be financially beneficial to the Treasury, British business and consumers.”