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Inflation may prompt 15p-a-bottle wine duty hike

Published:  13 December, 2011

The wine trade is braced for a 15p-a-bottle duty hike in the spring Budget.

The Chancellor is committed to an across-the-board alcohol duty hike of two percentage points above the Retail Price Index, currently running at 4.8%.

Analyst Tim Wilson said: "We estimate that the duty escalator will add a further 15p to a bottle of wine in March 2012, taking the average bottle very close to the symbolic £5 barrier for the first time."

Despite concern about deep discounting, inflation on wine increased from 2.4% in October to 6% in November, whilst inflation on spirits increased from 4.7% to 6.8%.

Wilson said: "Of course we welcome the overall drop in inflation from 5.2% in September to 4.8% in November. However the news is not so good for alcohol drinkers, as the rate of inflation on most types of drink continues to track above the All Items index.

"Our analysis also shows that increases in duty and VAT have increased the price of wine by about 5% over the last 12 months."