Drinks industry unites behind call for alcohol duty freeze
The Wine and Spirit Trade Association (WSTA), the Scotch Whisky Association (SWA), the UK Spirits Alliance (UKSA) and 400 spirits firms have written to the Chancellor demanding a freeze of alcohol duties in the upcoming Autumn Statement.
It comes as growing concern about the disproportionate impact on spirits of the August duty changes, but also on all alcoholic drinks sales across both the on- and off-trade.
The various associations and groups, which includes drinks giants such as Diageo, Bacardi Martini and Brown-Forman, have now called on Chancellor Jeremy Hunt to keep his promise to halve inflation by cancelling the planned increase in duty.
It follows excise duty on alcohol increasing by 10.1% from 1 August with the Office for National Statistics (ONS) claiming that the increase caused the largest rise in UK inflation on record.
The ONS paper stated the 0.37% contribution to the annual rate in August 2023 from alcohol and tobacco was the largest from that area of the economy since being collected in 2006, with the dataset revealing alcohol prices alone jumped 3% compared to 0.8% a year earlier.
In an open letter, the groups said a rise in alcohol tax would “irrevocably harm British businesses, including those in the hospitality sector”.
Three quarters of the cost of a bottle of whisky or gin is currently claimed in tax, they said, with spirits generating a third of all alcohol sales in restaurants, pubs and bars.
The letter says: “A duty increase or further widening of the differentials between spirits with beer and cider in the on-trade would continue the imbalance in the duty system which discriminates against high-quality spirits in favour of high-volume beer and cider.
“During a cost-of-living crisis and when inflation remains stubbornly high, all possible action should be taken to support the spirits industry which has driven revenue, boosted growth, and is a world-class UK sector.
“We urge you to rule out any increase in alcohol duty on 22 November and back our spirits businesses – as they have continually backed Britain.”
The chief executive of the Scotch Whisky Association, Mark Kent, said a rise in duty was “a mistake” and didn’t fit with the promise to lower inflation.
Miles Beale, Chief Executive of the Wine & Spirits Trade Association, added that after the largest tax rise in almost 50 years of alcoholic drinks, an increase would “undermine the Government’s own priority of bringing inflation under control”.
He said: “The damage done by August’s hikes are clear: they have stoked inflation, pushed up prices for cash-strapped consumers and damaged British businesses all across the hard-hit alcoholic drinks and hospitality sector, including distillers. A second alcohol duty rise would be self-defeating and could prove the final nail in the coffin for some British drinks businesses.”
UK Spirits Alliance chairman Stuart Eke said Hunt should back “a world-renowed domestic industry” and English Whisky Guild chief executive Morag Garden said Government support was needed to “protect and boost’ the homegrown spirits industry and deliver investment.
Garden said: “A further tax hike will only hurt an industry looking to grow and households struggling with rising costs.”