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UK's WSTA highlights drinks tax burden on consumers

Published 20 December 2016

The UK's Wine and Spirit Trade Association (WSTA) is urging the government not to increase duty on wine and spirits next year, saying that consumers are already experiencing heavy burden of tax.

Tax accounts for over 50% of the total cost of the average family’s festive alcohol shop.

But French consumers will only pay 32% tax on the same goods at the French supermarket checkout.

An average festive season shop, consisting of 5 bottles of wine, 2 bottles of Champagne, 2 bottles of sparkling wine, 3 bottles of spirits, 2 bottles of port, 24 cans of beer and 12 ciders costs a UK family £171.66 of which  £88.19 goes directly to the Chancellor.

The total cost of the equivalent shop in France would be £136.89, that’s £34.77 cheaper than the UK.

The tax paid on the French shop (duty plus VAT) is just £43.52, which is £45 less that the UK (£88.19). The difference between the two baskets can entirely be accounted for by alcohol duty, with the difference in duty alone (not including VAT) at a remarkable £38.87.

The Wine and Spirit Trade Association CEO Miles Beale said: “Comparing the wine and spirit tax regime in the UK to that in France puts the UK’s high rate of excise duty firmly in the spotlight. Over 50% of the bill at the checkout will go straight to the Treasury.   

“Earlier this year we communicated the impact that the fall in sterling’s value will have on wine prices. Thus far businesses have been able to shoulder the burden by absorbing the extra costs.

"This will be welcome for consumers, particularly in the run up to Christmas. However, in the New Year, we should be under no illusion that prices will rise. In addition, with inflation levels rising to 1.2% in November, spirits prices will increase and wine will be hit again.

“And that is also why it’s vital there is no increase to duty on wine and spirits at the next Budget in March. The Chancellor can provide welcome relief for businesses that have some extremely testing times ahead.”

The wine and spirit industry plays a hugely important role in the UK’s economy, directly and indirectly supporting almost 600,000 jobs and generating £45bn in economic activity.

The UK wine and spirits industry in 2015 contributed £15.6bn to the Treasury.

UK vs France Christmas alcohol costs:

 

UK

France

Cost of average Christmas shop

£ 171.66

£ 136.89

Amount of tax paid on the average Christmas shop

£ 88.19

£ 43.52

Percentage of Christmas shop which is tax

51%

32%



Source: Company Press Release