Wines and spirits trade association the WSTA has called on the Treasury to freeze wine and spirit duty in the upcoming Budget. It argues the Chancellor’s recent tax windfall resulted from him delivering a duty freeze last November that helped cash strapped consumers and given a boost to British businesses.
The latest HMRC figures show that in the six months to July following last year’s freeze the Treasury received a £270 million windfall from alcohol duty, equating to a 5% increase on the previous year.
Of this 61%, came from the sale of wine and spirits, with many choosing to enjoy a glass at home and in pubs during this Summer’s hot weather.
Duty hikes were expected at the 2017 November Budget, but politicians listened to the WSTA, businesses and consumers and scrapped planned duty rises.
Hammond cited tighter household budgets and declining pub sales as key reasons behind the decision. Pubs are continuing to struggle with 18 closing a week in Britain, according to the latest industry figures.
During his Budget speech in November, the Chancellor said: “Recognising the pressure on household budgets and backing our Great British Pubs, duties on other ciders, wine, spirits and on beer will be frozen.”
Despite the Treasury being given a boost from the freeze, Hammond is still planning to increase excise duty by a projected inflationary rise of 3.4% at the next Budget this Autumn.
The WSTA has drafted a Budget submission document which will shortly be submitted to the Treasury, clearly setting out that a further freeze on duty for all alcohol products will help an aspirational and innovative industry realise its potential.
Miles Beale Chief Executive of the Wine & Spirit Trade Association said: “A freeze to alcohol duty is a win/win/win for the Treasury, the wine and spirit trade and consumers – our Budget submission makes this case clearly to the Chancellor. Philip Hammond chose to freeze alcohol duty in November for good reason, as he rightly recognised that consumers are feeling financial strain, and acknowledged the need to show support to our great British pubs. His strategy was a sound one and he landed a windfall for government coffers too.
“With Brexit looming, the pressures on British businesses and consumers are only increasing. A freeze would help ease the uncertainty and disruption heading our way in 2019.
“We are asking Philip Hammond to support British consumers, pubs and the wider hospitality trade by giving us a for a fair freeze for all.”