WSTA pleads for easing of tax pressure as wine bottle price hits £5.58

The Wine & Spirit Trade Association has called on the government to hold back on further duty increases after what it described as a triple whammy of price hikes.

The industry’s bodies latest quarterly Market Report – published today to coincide with the annual WSTA conference being held in London – shows that the average price for a bottle of wine in shops is £5.58, up 4% on a year ago.

The WSTA said the rise was the result of the combined effects of Brexit’s impact on the pound, rising inflation and a 3.9% duty increase in the March Budget. 

Chancellor Philip Hammond said at the time that there would be no change to alcohol taxation policy which delivers year-on-year increases in line with the retail price index for the duration of the current parliament.  

For the autumn Budget, this could force wine duty up by a further 8p a bottle, and spirits by 29p, the WSTA said. 

WSTA chief executive Miles Beale said: “Unless government starts showing support for our under-valued alcohol industry, in November we’ll find ourselves on the end of a further blow to follow up the triple whammy combination already dealt out to our industry this year. We need a time out from excise duty increases.”

A YouGov poll published in the report reveals consumers’ unease at creeping costs, with 80% of people concerned over the prospect of paying higher prices, up from 71% in February, said Beale.

He added: “It is time for the Chancellor to act positively by addressing the wine and spirit industry’s historically high and deeply unpopular duty levels.” 

Some 56% of the cost of the average bottle of wine is taken up in tax, including £2.16 in duty and 92p in VAT.

This compares with 21% of the price of a bottle of wine sold in France or Spain and 19% in Germany.