Beer, cider and spirits enjoy duty freeze but wine takes a clobbering

Beer, cider and spirits all enjoyed a duty freeze as the Chancellor delivered his autumn budget statement, but wine was hit by an RPI increase.

Wine drinkers will have to pay 3.4% more on their favourite bottles as Philip Hammond singled it out for a clobbering, while so-called “white ciders” will also be taxed at a new higher rate.

Miles Beale, chief executive at the Wine & Spirit Trade Association, said: : “We welcome the Government’s decision to freeze duty on spirits, which will support this great British sector to invest, grow and create jobs - as well as supporting the public finances through increased revenues. 

However, the decision by the Chancellor to increase wine rates significantly is a hammer blow to this great British industry. It actively undermines a sector that has been hardest hit since the Brexit Referendum and will be thoroughly unwelcome for the 33 million consumers of the nation’s most popular alcoholic drink.

“This inflationary rise is grossly unfair, unjustified and counter-productive. The UK is the world’s biggest wine trading nation and, as such, deserves government’s support, not punishment.

“The wine industry is, unfortunately, no stranger to harsh treatment from Chancellors. Since 2012 wine overtook beer as the largest contributor to the public purse through duty payments, and no alcoholic drink has paid more to the Treasury since then. Today’s announcement means that only twice since 2003 that Chancellors from either party have showed their support to an industry employing some 190,000 people across the country.

“By increasing the UK’s already excessive duty rates the Chancellor will clobber wine importing businesses, including thousands of SMEs; stifle growth of our flourishing English wine industry; and raise prices for consumers.”

Diageo, the UK’s largest spirits supplier, was understandably more upbeat. Charles Ireland, General Manager for Diageo Great Britain, Ireland and France, said: “We are delighted to have a Chancellor who wants to help drinkers of Scotch, Gin, and our hard-pressed pubs.

“Philip Hammond has listened to the industry and his Scottish colleagues, and today has acted to support our world beating spirits industry. We thank those within the party of Government who have made the case for Scotland and stood up for the 50,000 jobs this industry supports, with particular thanks to Secretary of State for Scotland David Mundell, Ruth Davidson and the Scottish Conservatives.

“We also recognise the interventions by the SNP, DUP, Lib Dems and Labour that helped secure today’s decision.”

Bruce Ray, corporate affairs director for Northampton-based Carlsberg UK, was equally delighted, adding: “Once again, The chancellor’s announcement of a freeze in beer tax is fantastic news. It will be warmly welcomed by brewers, their employees and the thousands of hard working publicans across the UK. And of course, it’s brilliant news for all of us who enjoy a beer in its many wonderful varieties. 

“Previous freezes in beer tax have supported investment into growth, maintenance and innovation in pubs and breweries – demonstrating the crucial social and economic contribution that our industry makes to the UK.

“This year’s freeze will support continued investment, the creation of new jobs, and ultimately benefit our beer-loving nation - Long live the local.”

Brigid Simmonds, Chief Executive of British Beer & Pub Association, said: “Pub-goers across the UK will be toasting the Chancellor tonight following his decision to freeze beer duty. This early Christmas present will save brewers, pubs and pub-goers £110 million and secure upwards of 3,000 jobs that would have been lost had beer duty gone up.

“Clearly, the Chancellor has listened to the seven in 10 people in the UK who said they’d like to see beer duty cut or frozen in the Budget. Pubs are so important to their local communities and 82% of the beer we drink here is brewed in the UK.

“This is a big step in the right direction and a huge help for pubs across the UK that are struggling. I hope we can continue to build on this success in the future and we will continue to celebrate the vital role that local pubs play in communities and highlight the ongoing pressures they face by supporting the Long Live the Local campaign.

“The Chancellor’s announcement to cut business rates for high street and other small businesses is also great news for a lot of pubs. This will benefit community pubs by £120 million over the next two years, securing the viability of many locals across the country. We would urge the Chancellor to use the announced Digital Services tax to provide further support for all pubs large and small.

“Furthermore, the Chancellor’s decision to announce a review of Small Brewer Relief is most welcome.

“The announcement that the contribution by small businesses for the Apprenticeship Levy will decrease from 10% to 5% is also very good news for pubs. Likewise, so is the increase in investment allowance from £200,000 to £1 million. BBPA members invest over £200 million in their pubs each year.

“These decisions are particularly welcome in light of the additional cost pressures facing pubs, such as increases in the national minimum wage and the previously announced increase in the climate change levy.

“Overall, this has been a great Budget for pubs and pub-goers. Cheers Phil!”

“Pub-goers across the UK will be toasting the Chancellor tonight following his decision to freeze beer duty. This early Christmas present will save brewers, pubs and pub-goers £110 million and secure upwards of 3,000 jobs that would have been lost had beer duty gone up.

“Clearly, the Chancellor has listened to the seven in 10 people in the UK [1] who said they’d like to see beer duty cut or frozen in the Budget. Pubs are so important to their local communities and 82% of the beer we drink here is brewed in the UK.

“This is a big step in the right direction and a huge help for pubs across the UK that are struggling. I hope we can continue to build on this success in the future and we will continue to celebrate the vital role that local pubs play in communities and highlight the ongoing pressures they face by supporting the Long Live the Local campaign.

“The Chancellor’s announcement to cut business rates for high street and other small businesses is also great news for a lot of pubs. This will benefit community pubs by £120 million over the next two years, securing the viability of many locals across the country. We would urge the Chancellor to use the announced Digital Services tax to provide further support for all pubs large and small.

“Furthermore, the Chancellor’s decision to announce a review of Small Brewer Relief is most welcome.

“The announcement that the contribution by small businesses for the Apprenticeship Levy will decrease from 10% to 5% is also very good news for pubs. Likewise, so is the increase in investment allowance from £200,000 to £1 million. BBPA members invest over £200 million in their pubs each year.

“These decisions are particularly welcome in light of the additional cost pressures facing pubs, such as increases in the national minimum wage and the previously announced increase in the climate change levy.

“Overall, this has been a great Budget for pubs and pub-goers. Cheers Phil!”

Cider producer Aston Manor was less positive and sales and marketing director Glen Friel said: The Chancellor’s failure to fully recognise the issues the cider industry is facing is of some concern.

“Though we are grateful that the situation hasn’t been worsened with this freeze, as the industry has been in decline for several years, we asked for a 2p reduction in duty on the price of a standard pint.

“This would have been fair and allowed British cider makers the chance to continue to support local communities and the rural economy.

“At Aston Manor, we have invested tens of millions in recent years, increasing local employment and becoming more sustainable. It will be harder to continue to do the same in future years without recognition from Government of the specific challenges we face.”

Karen Betts, Scotch Whisky Association chief executive, said: “The Chancellor has made the right decision for the public finances, the industry and for consumers. 

“The continuation of the duty freeze is a very welcome show of support for the Scotch Whisky industry, which plays an important role in the UK and Scottish economies and which is one of the UK’s most successful exporters. 

“Time after time, the industry has shown that a stable rate of tax both boosts government revenue to help support vital public services and creates an environment which encourages investment in future growth. 

“We have welcomed the support shown to the industry by the politicians from across the UK and the political spectrum who have backed our campaign and have stood up for the industry and the communities it supports.  We welcome too the sound course set today by the Chancellor, which supports the industry’s global competitiveness, nurtures growth and backs jobs and investment. 

“However, the Scotch Super Tax remains, with £3 in every £4 spent on the average priced bottle of Scotch in the UK still collected in taxation, and a significant disparity between what consumers pay in tax on Scotch and other alcoholic products. 

“HM Treasury should move quickly to begin detailed discussions with the industry about long-term reform of the UK’s alcohol tax regime.”

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