Duty on Spirits, beer and cider duty to be frozen

16 March, 2016

The Chancellor of the Exchequer has announced in the Budget today (March 16) that the UK duty on spirits, beer and cider duty will be frozen but wine duty will rise with inflation.

Wine and Spirit Trade Association chief executive, Miles Beale (pictured) said: “We are pleased with the Chancellor’s decision to freeze spirits duty. The 26m spirits consumers will raise a glass to that tonight.

“However, we are disappointed that that 30m wine consumers have been singled out for a duty rise. The freeze in wine duty in 2015 has resulted in £118m extra in revenue to the Treasury in the last 10 months, up 4%, which makes it very unfair that wine has been penalised,” he said.

"We also deeply regret that the Government has missed this important opportunity to support the emerging English wine industry, which is a real home-grown success story that needs nurturing rather than being hit by another unfair tax increase.

“The failure to rebalance this unfair tax burden on the wine industry will stifle the industry’s ability to invest, to sustain the 270,000 jobs it currently supports and to help British pubs, bars and restaurants where – at £4bn per annum. it makes a significant and fast growing contribution,” said Beale.

The Scotch Whisky Association (SWA) has welcomed the UK Government’s decision to freeze excise duty but it says a cut would have provided a bigger boost for consumers, a vital home-grown industry and public finances.

The SWA says as a result of today’s freeze, tax – VAT and excise duty – remains at 76%, a level that three quarters of the British public believe is too high. The excise duty on a 70cl bottle of Scotch at the average price of £13 is £7.59 and the total tax burden is £9.91.

Last year’s 2% cut in excise helped boost revenue from spirits for the Treasury by £102 million and the Scotch Whisky Association had argued that George Osborne should do the same this year to help the public finances, a home-grown industry and consumers.

Despite the Government opting for a freeze rather than a cut the SWA says that scotch whisky will remain one of the UK’s most vital industries, says the association, supporting more than 40,000 jobs across the UK. It will also continue to be one of the UK’s biggest exports. Without the success of scotch, the UK’s trade deficit would be 11% larger.

SWA chief executive David Frost said: “We welcome the freeze in excise duty on spirits. We hope that this will sustain continued growth in the UK market for scotch whisky and thus help improve the public finances. But tax is still 76% of the price of an average bottle of Scotch and the majority of the British public think that is unfairly high. We will continue to call for fairer taxation of scotch, a vital UK industry, and we urge duty reductions in future years.”

Andrew Cowan, managing director, Diageo Great Britain said: “Scotch, as a home grown industry, flies the flag for the UK abroad and the alcohol industry as a whole generates billions for the UK economy. This year’s freeze on beer and spirits will help to continue this. We have already seen the positive impact that last year’s duty cut had on industries such as Scotch whisky and so tonight, people across the nation will once again raise a toast to the Chancellor.”

Keywords: WSTA, duty, SWA, budget

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