WSTA survey highlights urgent need for alcohol duty freeze

The Wine and Spirit Trade Association (WSTA) has said its members “overwhelmingly support” the organisation’s calls for a six-month suspension to alcohol duty.

The WSTA surveyed its members about challenges they are facing during the Coronavirus crisis and the results showed the most immediate concern was cashflow, with 95% of companies agreeing that the government should suspend excise duty for six months “to provide the lifeline that keeps them afloat”.

Many businesses faced duty bills on March 25 and were unable to pay. Some were then granted a deferment by HMRC for three months, but the WSTA is calling for this deferment to be converted to a duty suspension to enable companies to keep hold of vital funds. It would also help avoid adding debt to business.

The survey also confirmed that supermarkets have experienced a temporary boost in alcohol sales due to customers stockpiling, while other alcohol businesses have seen a short-term increase in demand. For others, it said, “the future looks grim”.

Miles Beale, chief executive of the WSTA, said: “The WSTA, our members and the wider drinks sector have welcomed many of the measures announced by the Chancellor to support businesses as a result of the Coronavirus. Excise duty reliefs continue to be the most common suggestion of a way that government can make a real difference to the sector.

“Our members’ survey showed overwhelming support for a six-month suspension to alcohol duty. Government has made it clear that there is no quick fix to the Coronavirus crisis and has warned that it could be six months before life in the UK returns to normal. With many businesses facing duty bills again in three months’ time, the wine and spirit trade is likely to find itself under even greater financial pressure than they were at the beginning of the outbreak.

“Another key concern highlighted by members was that taking up government-backed loans would take time and would risk leaving businesses drowning in debt at the end of the lockdown period. The impact will be even greater on cash-strapped SME’s with limited access to capital and restricted cashflows.”

Related articles: