Alcohol tax freeze comes as a huge relief to wine and spirit businesses

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The Wine and Spirit Trade Association has welcomed the Chancellor’s decision to listen to British business and UK consumers by freezing wine and spirit duty.

The announcement comes after a WSTA campaign called on the Chancellor to support the wine and spirit industry after the pandemic led to the “crushing, continuing closure” of the hospitality sector.

A freeze will allow businesses to “recover, rebuild, create jobs and – in time – replenish revenues to the Treasury” and will keep prices down for cash-strapped consumers.

The decision by Rishi Sunak MP to freeze alcohol duty could not have come at a better time for the UK wine and spirit industry, which not only has to deal with the chaos created by Covid-19 but is also navigating a new trading landscape post Brexit.

The freeze is a vital lifeline which will help our talented SME British distillers and English wine makers to invest and grow, as well as help save jobs in the UK’s huge wine importing and exporting industry.

Miles Beale Chief Executive of the Wine & Spirit Trade Association, said:
“The decision to freeze wine and spirit duty comes as a huge relief for British businesses, pubs, restaurants and its suppliers following the crushing – and continuing – closure of the hospitality sector, for months on end, during the pandemic.

Chancellor Rishi Sunak seems to “get it”. He understands that supporting our industry will allow it to recover, rebuild, create jobs and – in time – replenish revenues to the Treasury. He has also shown he is in touch with men and women from all walks of life who want to enjoy their chosen tipple without getting stung by further tax hikes.

We will all raise a glass to the Chancellor tonight – and look forward to more permanent support for the sector following the review of alcohol taxation.”

Recent HMRC figures show the number of distilleries registered in 2020 shot up to over 560 as the UK boosted its distillery numbers by a record breaking 124 last year, doubling the number of UK distilleries in four years.

Despite the pandemic bold investors have decided to back British business and await the re-opening of the hospitality sector to achieve their full potential. The UK spirit industry is worth around £11 billion in economic activity and supports some 230,000 jobs.

The UK wine industry brings in around £11 billion to the UK economy and supports some 130,000 jobs. As well as the UK being the home of some of the world’s biggest bottling plants it also has a thriving English and Welsh wine industry which now boasts 763 vineyards in the UK and 164 wineries. This rapidly growing industry also represents a changing UK agricultural sector and one that offers high quality rural jobs that boost local economies, as well as supporting biodiversity and sustainability.

The measures taken by the Chancellor today means a saving in duty payments of £100 million for wine and spirit businesses. This is the amount saved based on the assumption that Government was set to carry out plans to increase excise duty by inflation at 1.4% RPI.*

· Duty on a 750ml bottle of wine remains at £2.23

· Duty on a 750ml bottle of sparkling remains at £2.86

· Duty on a 750ml bottle of fortified wine remains at £2.98

· Duty on a 70cl bottle of vodka at 37.5% remains at £7.54

· Duty on a 70cl bottle of gin at 40% remains at £8.05

Also announced today, the Government have given a further extension to the VAT cut for the hospitality sector, but this does not include alcohol.

Miles Beale, added:
“We also welcome the extension to the VAT cut for the hospitality sector, but it is disappointing that the Chancellor did not extend this to include alcoholic drinks, which would have given the trade a real boost when they are finally allowed to re-open their doors to the public.”

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