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UK drinks SMEs call for duty cut

A collection of British winemakers, distillers and retailers have called on the new chancellor to cut the duty in his next budget to help boost business.

The companies, all considered small and medium-sized enterprises (SMEs), have signed an open letter to chancellor Rishi Sunak appealing for a cut of 2% in wine and spirit duty to help their businesses flourish.

Currently, the duty levied on spirits (£8.05 per bottle) means that British distillers paid 52% of all spirits duty receipts collected across the EU in 2018/19.

Karl Mason, founder of Masons Yorkshire Gin, said: “Mr Sunak recently visited our distillery and was keen to hear how we managed to rebuild our business after a devastating fire destroyed the old distillery last year. We are extremely proud of what we have achieved to date and with more government support our family run gin distillery can go from strength to strength. To allow us to further invest and grow we urge the new Chancellor to cut our excessively high duty rates at the Budget next month.”

A duty freeze in 2017 led to a tax windfall for the Treasury but it rose again for wine and spirits in 2018.

The government’s own Alcohol Duty Bulletin records that in the six months since the last duty hike there has been a slump in wine sales leading to a drop of 2.1% in revenue from £2.5 billion to £2.4bn.

If that rate of decline continues, it could cost the Exchequer £93m.

Miles Beale, chief executive of the Wine and Spirit Trade Association, said: “This Budget comes at a crucial time when the trade is facing upheaval as the new trading landscape unfolds. By cutting wine and spirit duty the Chancellor would be allowing British business to invest and grow.

“Duty rises are bad for consumers, bad for British SMEs – which are the backbone of this successful British industry – and also bad for the Exchequer, as the Government’s latest figures clearly show. After wine was singled out for a duty rise wine revenues have fallen on the previous year, in line with a slump in wine sales.

“If Government chooses to increase what are already some of the world’s highest alcohol tax rates, it will not only push up prices for people who voted them in, but will also hit hard an SME-heavy industry that prides itself on flying the flag for brand Britain.”

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