|WSTA urges government to end duty escalator|
|Written by Carol Emmas|
|Tuesday, 05 February 2013 15:49|
The Wine & Spirit Trade Association is to meet with economic secretary to the Treasury in a bid to make a case for an end to the alcohol duty escalator.
At the annual meeting held today and ahead of the Budget in March, the WSTA will also offer closer cooperation to deliver deregulation and tackle fraud.
The WSTA has also written to the pubs minister to request a meeting ahead of this year's Budget, to highlight the importance of wine and spirits to the pubs sector. The Alcohol Duty Escalator, which applies equally to beer, cider, wine and spirits, is set to raise alcohol taxation by over 5% again this year. This would mean that since its introduction in 2008 wine duty will have increased by 50% and spirits duty by 44%.
It believes that this approach is the key to realising the economic potential of the industry, including generating economic growth and creating jobs.
WSTA chief executive Miles Beale said: "Few British businesses have been hampered as much as those in the wine and spirits sector over recent years. As if the current trading environment wasn't challenging enough, WSTA members have been buffeted by a combination of alcohol and fuel duty escalators, rising costs of raw materials and a regressive alcohol strategy that threatens suffocation by red tape."
He added: "As we are facing a triple-dip recession, the Treasury should be looking to ease the regulatory and tax burdens on an industry that already contributes some £16 billion to the public purse and supports close to two million jobs. We are calling on the government to take a different approach and to encourage growth and job creation in the industry."
In support of his invitation to Brandon Lewis MP, the minister for community pubs, Beale, said: "We also want the pubs minister to understand and recognise that the wellbeing of British pubs is at stake. Wine and spirits account for 41% of the value of products sold in the on-trade or some £9.4 billion annually and are a vital component to the future of the pub industry. The clear message to the government is that any rise in alcohol taxation – on beer, cider wine or spirits – has an immediate and negative impact on a British industry."
The alcohol duty escalator was introduced in 2008 and applies to beer, cider, wine and spirits equally. The escalator increases alcohol taxation by 2% above inflation each year and is set to continue until 2014/15.
According to the Office of National Statistics and HMRC data, the increase in wine taxation since 2008 will be 50% and spirits will be 44% if the chancellor presses ahead with a rise of 2% above inflation in the Budget this year.