Several trade organisations have called on the chancellor to cancel the planned increase in alcohol duty when he delivers the Autumn Statement on November 22.
Businesses have urged Jeremy Hunt to keep his promise to “halve inflation” by freezing duty. In an open letter, the Scotch Whisky Association (SWA), UK Spirits Alliance (UKSA), English Whisky Guild (EWG) and Wine & Spirits Trade Association (WSTA) have warned the chancellor that a further increase in alcohol tax will irrevocably harm British businesses, including those in the hospitality sector. The organisations represent around 400 drinks producers across the country.
Excise duty on alcohol was increased by 10.1% from August 1, and citing an Office for National Statistics report, the trade groups said the increase “caused the largest rise in UK inflation on record”.
SWA chief executive Mark Kent, said: “Raising alcohol duty in August was a mistake the chancellor shouldn’t repeat in November. Distillers fear a further tax increase, the impact of which won’t just be felt by drinks producers but by the businesses they support and ultimately by consumers. Mr Hunt has promised to lower inflation and to help deliver on that promise he needs to rule out any further increase to alcohol duty.”
WSTA chief executive Miles Beale added that any further increase would undermine the government’s own priority of bringing inflation under control.
“The damage done by August’s hikes are clear: they have stoked inflation, pushed up prices for cash-strapped consumers and damaged British businesses all across the hard-hit alcoholic drinks and hospitality sector, including distillers. A second alcohol duty rise would be self-defeating and could prove the final nail in the coffin for some British drinks businesses.”
Stuart Eke, chairman of the UKSA said the chancellor should use his Autumn Statement to back a “world-renowned domestic industry”, while Morag Garden, chief executive, EWG, said the government’s support is needed to help protect and boost the homegrown spirits industry that is “creating jobs in regions throughout the UK, delivering investment into our communities, and taking brand UK across the world through our export lead growth agenda”.
“We want the chancellor to deliver this support by using his Autumn Statement to freeze duty for spirits. A further tax hike will only hurt an industry looking to grow and households struggling with rising costs,” she added.