Renewed calls for government to rethink alcohol duty

04 February, 2011

Chancellor George Osborne is being urged by the drinks industry to abandon next month’s planned tax hike on wines and spirits.

The Wine & Spirit Trade Association said the latest market figures show a 2% decline in wine sales and a stagnant spirits market. It warns that if the government goes ahead with the scheduled duty escalator in the coming Budget, the consequences for the industry would be dire.

WSTA chief executive Jeremy Beadles said: “With the recent VAT increase adding to the weekly shopping bill, it’s no time to force drinks prices up further with another inflation busting tax increase.

“The scale of tax rises on wine and spirits in recent years has cost thousands of jobs and made matters worse for households struggling to cope in difficult economic circumstances.

“Abandoning the tax escalator would help hard-pressed consumers and a sector which ought to be part of the drive to restore economic growth in the UK.”

Meanwhile SABMiller is calling on the government to rethink the entire duty system so that higher-strength products are taxed more rigorously than those with lower alcohol, as is the case in many European countries.

The brewer’s head of alcohol policy Kristin Wolfe said: “We propose that the alcohol duty regime is rebalanced to differentiate between the consumption of higher and lower strength alcohol products. The aim should be to nudge consumers towards lower strength products, such as beer.

“This will help protect jobs, support important domestic businesses and reflect the higher risks associated with higher-strength categories of products.”

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