The Wine and Spirit Trade Association (WSTA) has urged the chancellor to cut alcohol duty in a submission to the Treasury ahead of the spring budget in March.
The new duty regime – which taxes alcohol according to strength – was first introduced on August 1 2023, resulting in a considerable duty increase for both wine and spirits.
Writing to the Treasury this week, the WSTA suggested duty cuts in a move to combat falling sales volumes and reduced revenue.
Noting high inflation rates across wine (7.8%) and spirits (8.9%), the trade body argued that a duty decrease is now the only way to reduce inflation and stop the decline in sales.
Miles Beale, chief executive of the WSTA, said: “Last year’s duty increases have had an immediate and negative impact on wine and spirit sales volumes. Not only has this hurt British businesses, it has fuelled inflation and reduced excise duty receipts.
“History has shown that cutting excise duty leads to increased sales, keeps price rises down for consumers and brings more revenue into the Exchequer. We are calling on the chancellor to check the records and take action that will benefit Treasury coffers, British business and consumers – cut duty rates and give everyone a much needed boost.”
In the submission to the Treasury, the WSTA also implored the chancellor to make the current wine duty freeze permanent when the spring budget is announced on March 6.
As part of its move to prevent duty hikes, the WSTA has partnered with Drinks Retailing in a joint Crush the Red Tape campaign, which calls on the government to keep all wines between 11.5% and 14.5% abv taxed at an assumed strength of 12.5% abv.
Beale said: “Making the wine easement mechanism permanent to prevent the impact of more red tape and higher running costs would bring relief and improve business planning certainty for the UK’s SME-rich wine industry. The prospect of losing the easement continues to be their single biggest concern. The government needs to listen and do the right thing.”
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