The Wine and Spirit Trade Association (WSTA) is urging the chancellor to cut alcohol duty, after HMRC figures showed losses of £600 million to Treasury coffers.

Duty hikes implemented in August 2023 represented the largest rise in nearly 50 years, adding 20% to excise duty on 85% of all wines on the UK market, as well as 10% on full strength spirits, according to the WSTA.

Now, HMRC data published today has revealed that excise duty receipts for wine and spirits resulted in a £436 million loss between September 2023 and January 2024 compared with the same time period in 2022/23. Combined with beer and cider losses, Treasury coffers are down by around £600 million.

The WSTA is now calling on the government to announce an alcohol duty cut in the upcoming spring budget to help combat inflation. 

Miles Beale, chief executive of the WSTA, said the new HMRC figures are a clear demonstration that last year’s duty rise has had “an immediate and negative impact on the amount of wine and spirit sold in the UK”.

He continued: “Recent history has shown that cutting excise duty can lead to increased sales, prevent further price rises for consumers and bring in more revenue into the Exchequer. We are calling on the chancellor to do himself – and everyone else – a huge favour by cutting alcohol duty.”   

As part of its message on duty, the WSTA is also calling for the government to retain the current temporary tax brackets for wine and prevent further increases. The WSTA has partnered with Drinks Retailing in a joint Crush the Red Tape campaign. The campaign calls on the government to keep all wines between 11.5% and 14.5% abv taxed at an assumed strength of 12.5% abv, and we encourage businesses to write to their MPs using this letter template.

While the new system may appear simpler in a spreadsheet, in practice, for the wine sector, the WSTA warned “it is categorically the opposite”. 

“If the easement ends, as planned in February next year, a single amount of duty paid on wines between 11.5 -14.5% abv – £2.67 – will be replaced by up to 30 different payable amounts from £2.45 – £3.10 per bottle.” 

The WSTA will be attending the Specialist Importers Trade Tasting (SITT) next week. For details on how to register for SITT, click here