Diageo: freeze duty on spirits only

By John Harrington

- Last updated on GMT

Related tags Alcohol duty escalator Alcoholic beverage Diageo

Spirit duty: should be frozen, says Diageo
Spirit duty: should be frozen, says Diageo
Diageo has called for spirits duty to be frozen — but the alcohol duty escalator on other drinks to remain until they are taxed at the same rate....

Diageo has called for spirits duty to be frozen — but the alcohol duty escalator on other drinks to remain until they are taxed at the same rate.

The Smirnoff and Guinness producer has urged a "staged reform" of excise duty "so a unit of alcohol in spirits, wine, beer, cider and ready to drink (RTDs) is taxed at exactly the same rate".

In its submission to the Treasury's review of alcohol taxation and pricing, Diageo said the "simplest way" to do this would be to hold spirits duty at its current level.

The duty escalator — 2% above inflation — would be added to other categories until they reach the level of spirits.

Diageo said such a move would generate between £524m and £1.9bn a year for the Treasury.

Simon Litherland, managing director of Diageo Great Britain, said: "We strongly believe that alcohol excise duty is, and should remain, solely an instrument for raising revenue.

"Our recommendation to the Treasury is the fairest and most transparent way to approach taxation of alcohol.

"It will bring revenue to the Government and will mean that the more alcohol in the drink, the more tax it will pay."

Diageo noted its opposition to the Coalition plans to tax so-called "problem drinks" — believed by some to include RTDs — higher.

The drinks giant argued that RTDs "are not the drink of choice" for underage drinkers or bingers.

Litherland said: "The proposal to target a tax at RTDs is unfair, inconsistent and disproportionate to the problem.

"Our solution is to tax all drinks according to their alcohol content. Such an approach will mean strong drinks with more alcohol in them pay more tax."

Related topics Spirits & Cocktails

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