12th February, 2016 by Lauren Eads
The Wine and Spirits Trade Association (WSTA) is ramping up its campaign for a cut in wine duty by highlighting the vast difference paid by consumers in the UK compared to Italy, which if the same would save the average Brit £287 a year.
UK consumers currently pay 55% tax on an average priced bottle of wine at approximately £2.05 per 75cl of wine, the second highest rate in the EU. For sparkling wine duty is 28% higher at £2.63 per bottle. For spirits this rate jumps further still to £7.26 per average priced 70cl bottle. Overall, the average Brit pays around £333 in alcohol tax every year, according to the WSTA.
In comparison Italian consumers pay no duty on wine and just 22% in VAT, compared to the UK’s 20%.
If Britain enjoyed the same duty rates as Italy total tax paid on alcohol by consumers could drop to just £46, saving £287 a year, according to the WSTA.
Last year duty on wine was frozen, while spirits received a 2% cut following the WSTA’s Call Time on Duty Campaign.
“Knowing that the UK has the second highest duty rate and that sparkling wine gets the worst deal of all in the EU is hard to swallow”, said Miles Beale, chief executive of the WSTA. “Prosecco is leading the UK market in sparkling wine sales, but is this any wonder with such strong domestic support for Italian wine makers from their government.
“Giving wine and spirits a 2% cut makes sense. Not only do British drinkers get a fairer deal but cuts bring more revenue to the Exchequer. In just nine months since the last March Budget following a cut to spirits and a freeze on wine duty, wine and spirits brought in extra £210m to the Treasury.”
This week CEO of Vinexpo, Guillaume Deglise, declared sparkling wine to be the “hottest category in the world”, with sales currently soaring, driven by Prosecco. Overall, UK consumption of sparkling wine by volume is expected to rise by 13.2% between 2015 to 2019, whereas still wines will achieve modest growth of just 0.6%, resulting in overall growth on 1.8%, according to data released today by Vinexpo in partnership with the IWSR.
In comparison, global consumption of sparkling wines are expected to increase in volume by 7.4% between 2015 to 2019, and still wines by 0.8%, resulting in an overall 1.4% increase in consumption.