WSTA calls for UK chancellor to prove he’s not a Scrooge

The Wine and Spirit Trade Association is calling on the UK’s Chancellor of the Exchequer to freeze wine and spirit duty in tomorrow’s budget.

The WSTA says  British consumers will be amazed to know the reality of the tax on their shopping. Seventy-six percent of the cash paid by shoppers on an average priced bottle of spirit goes straight to the Treasury and 56% of an average priced bottle of wine.

This Christmas 53.5% of a typical festive booze shop will go on tax if Philip Hammond fails to find his Christmas spirit on Budget day.

As a result of the Chancellor raising alcohol duty by 3.9% in the March budget, and if he goes ahead with plans for a second 3.4% rise tomorrow, this year’s basket of Christmas booze will cost  £4.40 more in duty and VAT, 5% more than last Christmas.

The inflationary increases are part of a government policy planned to last for the duration of this Parliament, which means the Government is set to rake in £1.9 billion over the next five years.

£92.95, of the basket of Christmas booze will go to the taxman, courtesy of VAT and the increasingly excessive duty rates in the UK. This means that tax now accounts for 53.5% of the basket.

Last year consumers paid £88.55 in tax on the cost of the average household’s festive alcohol shop, which was 51% of the total cost.

These calculations are based on a typical festive season shop, consisting of 5 bottles of wine, 2 bottles of Champagne, 2 bottles of sparkling wine, 3 bottles of spirits, 2 bottles of port, 24 cans of beer and 12 ciders. If consumers were chose average priced bottles or cans in this shop it would set a UK family back £173.83, of which £92.95 will go directly to the Treasury.

The association says the French have much more to celebrate this festive season as their shop is £27 cheaper and will pay just £46 in tax, meaning only 32% of the cost goes to the tax man.

The UK alcohol industry is one of the most heavily taxed in Europe, with British drinkers paying an extraordinary 68% of all wine duties collected by all 28 EU member states and 27% of all spirits duties. This is by far the most of any member state despite accounting for only 11 per cent of the total EU population.

WSTA chief executive Miles Beale, said: “Comparing the wine and spirit tax regime in the UK to that in France puts the UK’s excessively high rate of excise duty firmly in the spotlight. The Treasury will be taking more money than ever off of British businesses and consumers this Christmas if planned duty hikes go ahead.  

“A second rise this year will hit businesses hard at a time when they are dealing with higher costs through rising inflation, meeting the challenge of Brexit and decreasing consumer confidence. This will be particularly hard for our industry, its suppliers and consumers, to swallow, coming in the middle of the trade’s busiest period – Christmas.

The Chancellor can avoid being labelled a ‘scrooge’ this Christmas by freezing wine and spirit duty at tomorrow’s budget,” said Beale.

UK vs France Christmas alcohol costs:

UK

France

Cost of typical Christmas shop

£ 173.83

£ 146.61

Amount of tax paid on typical Christmas shop if duty is increased tomorrow

£ 92.95

£ 46.80

Percentage of Christmas shop which is tax if duty is increased tomorrow

53.5%

32%