WSTA warns of Prosecco price hike
The Wine and Spirits Trade Association has warned that the cost of a bottle of Prosecco could go up by 59 pence in the UK next year, and Champagne by as much as a £1, due to the combined impact of Brexit, inflation and alcohol duty.
Earlier this year the WSTA warned that the cost of still wine imported into the UK from EU countries could increase by as much as 29p a bottle due to the continued devaluation of the pound, amid the uncertainty posed by Brexit.
Taking into consideration continued inflation and a rise in duty on alcohol, the WSTA now estimates that increase could in fact be closer to 53 pence a bottle – a 10% rise.
Meanwhile the average-priced bottle of sparkling wine could increase by 9%, which would add 59p to a bottle of fizz, while the cost of Champagne is expected to rise by 5%, adding £1 to the cost of a bottle.
The WSTA published its estimations this morning, calling on the UK government to make a 2% cut to duty paid on wine in the 2016 Budget, pointing out that UK wine drinkers are already one of the most heavily taxed in Europe. UK consumers currently pay 68.4% of all wine duties collected by all 28 EU member states, despite accounting for only 11% of the population.
Average duty paid on an bottle of still wine in the UK is currently £2.08, meaning that 55% goes on duty and VAT, while the duty paid on an average bottle of sparkling wine is £2.67.
In comparison, consumers in France pay just 6 pence in duty on an average bottle of sparkling wine, according to the WSTA, with 3 pence paid on still wine.
“With Brexit costing 29p per bottle and rising inflation indicated by the Bank of England last week adding a further 17p, further duty rises could make it a triple whammy for consumers who are already paying a staggering amount of wine and spirit duty,” said Miles Beale, chief executive of the WSTA.
Wine was the only product singled out for inflationary rises in the UK’s 2016 Budget and the year before and in 2015 was the only category not to receive a 2% cut, with the WSTA last month publishing economic research by Ernst Young which indicated such a cut would boost the wine and spirits industry economic contribution by £2.9bn and also increase Treasury revenues by £368m.
“There is now less than a month to go before the Chancellor unveils his Budget – we are urging Philip Hammond to recognise the monumental challenge facing an industry that supports 270,000 jobs and contributes £19.9bn to the economy by making a 2% duty cut,” added Beale.