Spirits

Gin lovers to be hit by major price hike

By Nicholas Robinson contact

- Last updated on GMT

Gin hit: inflation set to hike up the price of gin
Gin hit: inflation set to hike up the price of gin

Related tags: Excise, Spirits trade association

Spirits drinkers’ pockets are expected to be hit by an inflation-induced price hike, following a similar story for wine, the Wine and Spirits Trade Association (WSTA) has warned.

Consumers already pay £3.3bn in spirits duty, but a predicted rise in inflation of 34p a litre could hit them with a bill of at least £60m.

Government policy dictates that alcohol duty rises are pegged to inflation, which means if inflation increases by a predicted 3%, the price of spirits will also rise.

The WSTA warned last week that, following the fall in the value of the pound, the average bottle of wine coming from the EU would rise by 29p a litre. Additional costs will by incurred if inflation rises.

Huge tax on spirits

Almost three quarters (74%) of the price of a bottle of spirits is tax, but this will rise if inflation goes up as much as anticipated, the WSTA said.

Spirits firms have criticised the planned hikes, calling them counterproductive, as evidence shows that following a freeze in wine duty in 2015, duty income increased on the previous year by 3.6% to £139m.

Following a cut in spirits duty in 2015, income also increased by £125m (4.1%).

UK wine and spirits contributed £15.6bn to the Treasury in 2015 and created 588,000 jobs directly and indirectly.

Duty is already ‘staggering’

WSTA chief executive Miles Beale said: “Drinkers of gin and other spirits are already paying a staggering amount in duty. Unless the Government reviews this policy, the rise in inflation will slap a further £60m on spirits consumers.

“And wine consumers could face a double blow if potential duty rises of £120m are added to the impact of the devaluation of the pound which, together, could cost over £400m this year alone.”

The UK wine and spirits trade is worth almost £40bn and makes a significant contribution to the UK economy and supports almost 600,000 jobs, added Beale.

“These British jobs will be put at risk by damaging tax rises, unless the Government re-examines its excise duty policy.”

Related topics: Spirits & Cocktails, Spirits

Related news

Show more

Related products

The MA Media Pack 2020

The MA Media Pack 2020

William Reed Business Media | 09-Jan-2019 | Product Brochure

'We reach more than 200,000 pub people every month’

Recently celebrating our 225th anniversary, The Morning Advertiser continues to...

Bar Essentials – Spirits Guide

Bar Essentials – Spirits Guide

Diageo | 05-Oct-2018 | Insight Guide

Spirit sales continue to rocket as a result of an ever-growing interest from consumers who are looking for experience, choice and more premium drink options.

Bar Essentials – Beer Guide

Bar Essentials – Beer Guide

Diageo | 19-Jul-2018 | Insight Guide

Beer continues to be a fascinating world, full of exciting products that are keeping customers engaged. From craft-inspired brews to stalwart lagers, on-trade...

Bar Essentials Guide

Bar Essentials Guide

Diageo | 23-Oct-2017 | Insight Guide

Spirits continue to be the fuel for growth of alcoholic drinks in the on-trade, tapping into consumer trends for premiumisation, choice and experience.

Related suppliers

Follow us

Pub Trade Guides

View more

FREE EMAIL NEWSLETTER

Subscribe to The Morning Advertiser

The definitive voice for the pub trade

Get the latest news, analysis and insights from the uk pub sector straight to your inbox!

Listen to The MA Podcast