Trade bodies ramp up campaign to cut alcohol duty

09 March, 2015

Trade bodies are ramping up their lobbying of parliamentary candidates by urging them to push for a duty cut on beers, wines and spirits.

The Society of Independent Brewers today published a Manifesto for British Beer, calling on prospective MPs to urge the Treasury to give beer a similar duty cut to those it enjoyed in 2013 and 2014 when the chancellor announces the Budget on March 18.

It highlighted the contribution independent brewers makes to their local economies, bringing investment and generating jobs, particularly among young adults.

Mike Benner, SIBA managing director, said: “The growth of the British brewing sector means there is now at least one brewery in almost every constituency in the country, bringing investment and jobs to the area, creating great beers and supporting local pubs. 

“We are urging parliamentary candidates to back our manifesto and show support for our national drink and a great British manufacturing industry, which, with the right support from government, will continue to contribute to wealth and employment across the country.”

The Wine and Spirit Trade Association and Scotch Whisky Association have intensified their Drop the Duty campaign in recent weeks, leading politicians to offer the industry hope the campaign could succeed.

The campaign is calling for a 2% cut on alcohol duty to allow the industry to invest in growth.

Today the WSTA turned the focus onto Britain’s thriving gin category, which has grown 9.6% in value in the past year (Nielsen and CGA).

Chief Executive Miles Beale said: “This is an incredibly exciting time for the gin industry here in the UK and further afield, where it is seen as a quintessentially British product.

“Gin has such a fantastic history and it is great to see elements of that woven into the artisan gin distillers operating in the UK and in London today.  But these small, often family-owned companies cannot afford to invest in their businesses under the current tax regime for spirits.

“A 2% drop in alcohol duty would lead to industry-wide investment and job creation, allowing this country’s gin companies to get on with what they do best – crafting delicious and creative new gins for us, and for the rest of the world.”

One-fifth of all gin consumed across the globe is supplied by British producers, according to the WSTA, but it said the current tax regime is holding the industry back.

Christopher Hayman, chairman gin producer Hayman’s, said: “A 2% cut in duty would have a substantial impact on our business. We have enjoyed over 150 years of success, dating back to 1863, through care and dedication to the gin we produce.

“However, we are struggling to stay competitive and meet our full potential under a tax regime where UK punters are paying almost three times as much tax on spirits as some of their European counterparts. I know our consumers are astonished when they hear that they are paying almost 80% tax on a bottle of our gin.

“This is why we at Hayman Distillers are backing the Drop the Duty campaign calling on the Chancellor George Osborne to cut duty at the budget in March. A drop in alcohol duty would allow us to invest in production, staff and keep the historic Hayman's name alive for generations to come.”

Alex Nicol at Scottish producer Spencerfield Spirit Company, added: “As a craft, family-run distiller in the UK, we feel the strain of the current levels of alcohol taxation on our business.

“We recently invested in a new still and have the potential to grow, but can only really expand if the Government delivers a drop in alcohol duty.

“Compared to bigger distillers, we must invest a much higher percentage of our capital investment into growing our business which instantly puts us on the back foot. We believe that if small distillers were given a tax cut to invest more in future growth, they would be able to thrive. The Government needs to stop and listen if it is serious about the potential growth of small gin distilleries”.

Tom Warner, director at Warner Edwards, said: “We take real pleasure in creating beautiful, artisan spirits, but the tax regime here in the UK is one of our biggest chokepoints as a business.

“Our small size allows us to craft creative and unusual gins but it also leaves us vulnerable to the market and a 2% cut would offer us some of the safety we need. The ideal scenario would be to make enough gin to last the year and storing it until we sell it. However, duty is owed no later than 30 days from the label application (or once the bottle is sold) so our ability to store large volumes of stock is fairly restricted by the tight leash we find ourselves on.

“People expect premium gin to have an alcohol content of more than 40%, so there is already more duty owed on a bottle of premium spirit. It’s difficult to prosper under such tax conditions.”

Retailers have also backed the campaign. Allen Daley, manager at London independent Gerry’s Wine and Spirits, said: “Our alcohol emporium is something of an institution and we have always taken great pleasure in providing Londoners with the widest array of weird and wonderful drinks.

“In recent years we’ve seen a real rise in appetite for quality gins and are delighted to pack our rafters with the finest gins from distillers across the UK. We pride ourselves on the carefully curated selection of gins on offer at our shop but with punters paying nearly 80% in tax on each bottle, the industry is under constant strain.

“A 2% cut in duty would be fantastic news for our business, allowing us to invest further in bringing the newest spirits and wines to market. But more than that, a 2% drop would give support to a gin industry that this country should be proud of.”




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