Wine duty could rise 54% in six years
Duty will rise 54% on wine and 31% on spirits in the next six years if the Chancellor does not scrap the duty escalator, according to the Office for Budget Responsibility.
George Osborne became the toast of the beer world when he ended the duty escalator on beer earlier this year, but escalator remains on wine and spirits.
The Wine and Spirit Trade Association launched a campaign called Be Fair George after its members said they were being unfairly punished and that an economic success story was in jeopardy by excessive tax.
But Osborne did not mention any plans to scrap the escalator in his autumn statement and the OBR, an independent organisation, calculated the rises in duty.
It also expects wine volumes to increase 19% and spirits volumes to grow by 1% within six years, but predicted beer volumes will drop 15% – despite there being no duty escalator on beer.
Drinks analyst Tim Wilson, who runs the Wilson Drinks Report, said : “We expect that the Chancellor will continue to implement the duty escalator on wines and spirits over the remainder of this parliament, and beyond.
“The level of increase in the predicted total duty receipts is proof of this.
“Wine duty would need to increase by 4.4% each year on average to achieve the estimated level of duty receipts by 2018/19.
“Despite volumes of still wine being in steady decline at the moment, wine duty receipts are expected to increase by 54% between 2012/13 and 2018/19. This is because HM Treasury believes that economic growth will be accompanied by large increases in the sales of wine.”
The Chancellor did pledge to freeze duty on fuel, which was welcomed by the British Beer and Pub Association.
But Wilson said: “We have been saying for some time that the Chancellor will prioritise duty freezes on petrol over freezes on alcohol duty – today’s announcement that the fuel duty has been frozen again demonstrates that any spare cash will be used to help car drivers, not drinkers, before the next election.”