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Published:  23 July, 2008

The response from the UK's drinks trade to Gordon Brown's latest Budget was mixed, with spirits producers upbeat and wine importers once again grumbling about cross-border shopping. It is scandalous that the duty on still and fortified wines has been increased by 2.8%, which is 0.5% above inflation,' said Jo Williamson, chairman of the Wine & Spirit Association, in response to the 4p increase in duty on a bottle of wine. The growth in wine consumption has already been slowing because of the state of the economy,' said Williamson. It will be made worse by the latest increase hitting the British drinks industry, which has suffered so much from cross-border shopping, smuggling and fraud.' Quentin Rappoport, director of the WSA, called the freezing of duty on sparkling wine a small victory', but was disappointed that the Government had not helped English wine producers by lowering their duty obligations. Rappoport also said that the rise in wine duty was a stealth tax' on wine-based RTDs, which would also be hit by the 4p rise. The freeze on spirits duty, for the sixth consecutive year, was welcomed by the Scotch Whisky Association, which called it another major step on the road towards a fair tax system for alcoholic drinks'. Edwin Atkinson of the Gin and Vodka Association said: The Chancellor has listened to our case. It reduces the tax discrimination against spirits compared to imported wine.' However, he also mentioned that the tax freeze does not significantly alter the current tax differentials between us and our nearest continental neighbours'.