Trade body rejects on/off duty differential for alcohol

The Wine & Spirit Trade Association has rejected suggestions that there should be different alcohol duty rates between the on-trade and off-trade.

The idea has gained traction in parliamentary circles in recent weeks as a way of catalysing recovery in the hospitality industry by cutting on-trade drinks prices.

“We don’t think there should be a differential," WSTA chief executive Miles Beale said, addressing the body’s annual Industry Summit today.

“If you want to support the hospitality sector in its recovery, and we very much do, they are not asking for anything around excise duty," Beale added.

“They want a lower rate of VAT; they’d like it extended to alcohol drinks. What they’d also like is something around business rates.

“Our argument to government would be give them what they need and what they want to recover.

“The alcohol duty review should fix a new system that is fairer, simpler and should be looking to be round for at least 30 years.

“An on- versus off-trade differential is not sensible. We also think it would be extremely difficult to put in place and enforce, and encourage fraud.

“Frankly, I think Treasury officials agree entirely with our view. It’s politicians who keep coming back to this idea, because they want a little gimme for some people who are lobbying very loudly.

“In the end, I think common sense will prevail.”

Beale said the WSTA wanted to see another all-round drinks duty freeze in the Budget next month.

“We want to see a freeze to allow the hospitality sector to recover," Beale said. "It’s been supressed artificially for longer than other parts of the economy.

“We’d also like to see the VAT cut [from 20% to 5% for the on-trade, introduced in July 2020] extended to include alcoholic drinks. That would be a very good move for the government.”

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