Harpers






Opinion poll

Should US wine producers try harder in the UK on-trade?

Log in

Register for free to apply for daily email bulletins and keyword alerts.

email address:

password:

Forgotten password?

Keep me logged in.


News
12 Mar 2008    

Budget 2008: Wine and Spirits focus

Read more about

By: Jamie Coggans

Alcohol has come under close scrutiny in Chancellor Alistair Darling's first Budget with duty up across the board for wine and spirits.


Alistair Darling

Darling announced a 55 pence increase per bottle of spirits - the first rise in spirits duty since 1998.

From midnight on Sunday, wine will also see a 14 pence increase per bottle.

The Chancellor said: “Mr Deputy Speaker, as incomes have risen, alcohol has become more affordable.

“In 1997, the average bottle of wine bought in a supermarket was £4.45 in today's prices. If you go into a supermarket today, the average bottle of wine will cost about £4.

“From midnight on Sunday, alcohol duty rates will increase by 6 per cent above the rate of inflation. Beer will rise by 4p a pint, cider by 3p a litre, wine by 14p a bottle and spirits by 55p a bottle.

“Alcohol duties will increase by 2 per cent above the rate of inflation in each of the next four years.”

Budget 2008 Key Points

• Wine (175 ml glass) +3p
• Wine (75cl bottle) +14p
• Sparkling wine (75cl bottle) +18p
• Spirits 37.5% abv (70cl bottle) +55p
• Spirits-based ready to drinks (275ml bottle) +3p
• Beer 4.2% abv (pint) +4p
• Cider (litre) +3p
• Sparkling cider (75cl bottle) +14p

Industry Reaction:

Wine and Spirits Trade Association (WSTA)

Jeremy Beadles, WSTA chief executive said: "It is no cause for celebration that British consumers will now pay more tax on wine than anyone else in the European Union.

"It is bizarre at a time when the economy is slowing, prices are rising and many families are feeling the pinch that the government should choose to add to their burden by making the simple pleasure of a glass of wine or spirits considerably more expensive.

"We are surprised that a government which came to power promising to govern in the interests of the many now wishes to punish them. Our polling shows voters don't support this."

"Wine and spirit drinkers already face the prospect of price rises as a result of the increasing cost of raw materials - grapes, grain, packaging, glass, freight and energy. This tax hike will simply make things worse for the average consumer.

"That the government should commit itself and future governments to an above inflation rate increase for alcohol for the next four years is hitting all drinkers for the sins of a minority even before it has received the results of its own report on Pricing, Promotions and Harm. A policy of commit now, hurt consumers now, study the issue later."

British Retail Consortium (BRC)


Stephen Robertson.Woolworths

Stephen Robertson, BRC dirtector, said: “We'll need to look beyond the headlines to the inevitable unannounced detail before we can fully assess this Budget, but it's clear the Chancellor has huge holes in his accounts and is trying to hide an old-fashioned tax grab behind a bags and alcohol smokescreen.

“We share the government's concerns on responsible drinking but are not convinced that raising the price of alcohol through taxation is the correct solution. The key issue is changing our culture and encouraging awareness of sensible drinking, a process retailers are committed to working with government on as part of its alcohol strategy. The problem with taxation on alcohol is that it's a blunt instrument that raises the price to millions of consumers who drink responsibly.”

Scotch Whisky Association

Gavin Hewitt, the SWA chief executive, said: “Scottish distillers are astonished by the Chancellor's announcement. The government's own figures show that any duty increase on whisky is likely to reduce revenue at a time when public finances are tight.

“A tax rise is a blow to international competitiveness when the industry has been investing significantly to meet growing global demand for Scotch Whisky. It sets a damaging precedent that export markets may follow.

“Today's introduction of a two percent above inflation 'alcohol tax accelerator' in future Budgets abandons moves to a fairer alcohol duty system in the UK and reverses the Treasury's long held position that it must retain flexibility when setting alcohol duty rates.”

Gin and Vodka Association (GVA)

Edwin Atkinson, GVA director general, said: "The Chancellor cannot have it both ways. Either he wants more revenue or he wants to reduce consumption. For spirits, he cannot have both. And given the huge increases in production costs, this increase is even more concerning."


 style=
HAVE YOUR SAY

Click on the button to include your comments on this story


Want more stories delivered to your inbox?
Then sign up here for our daily newsletter.

Email Small Delicious Icon  Delicious Small StumbleUpon Icon  Stumble Upon Small Facebook Icon Facebook Small Google Icon Google Bookmark
Back to Top Back to Top
 

 






Home | News | Products | Discussion Forum | Industry Opinion | Wine and Spirit Jobs | Events | Sitemap | Contact