Government making a mint from your booze sales

By Nicholas Robinson contact

- Last updated on GMT

How much? Government raking in record amounts on alcohol duty
How much? Government raking in record amounts on alcohol duty

Related tags: Wine, Spirits, Duty, Duty hikes

The Treasury is continuing to make a mint from UK booze sales, despite a freeze on alcohol duty in November, showing the sector can remain fruitful without another hike.

In four months, the Treasury earned £67m from wine and spirits sales, while collections from December 2017 to April 2018 were up 2% on the previous year to £3.291bn.

According to the Wine and Spirits Trade Association (WSTA), duty collections are increasing to record levels, with the Treasury set to cash in on an estimated £7.7bn on revenue from wine and spirits in 2017/18. This figure is up considerably on the previous financial year by £140m.

Duty on wine and spirits was set to increase in the November Budget; however, following much pressure politicians scrapped the rises.

Cost of duty on wine

The freeze in duty resulted in savings of 8p per bottle of wine, 11p on sparkling wine and 31p on an average priced bottle of spirits for consumers.

The stats show that, between December 2017 and April 2018, all alcohol duty collections – including wine, spirits, beer and cider – increased by 2% compared with the same period last year.

This brought an additional £86m in to Treasury coffers, despite the decision not to increase the rate of duty.

Of this, £67m came from wine and spirit sales alone, meaning that the wine and spirit industry accounted for 78% of the increase.

Wine collections have so far increased £33m (+2%) and spirits collections increased £34m (+2%).

It is only the second time in 15 years that wine duty has been frozen, yet the category remains on top of the revenue collections table, with 37% of collected duty coming from just 18% of sales.

‘Win for alcohol’

WSTA chief executive Miles Beale said: “We have always said a freeze on alcohol duty is a win/win for both the Treasury, the wine and spirits trade and consumers.

“We hope the latest windfall to Treasury coffers coming from the Budget freeze encourages the Chancellor to continue to stay in touch with what consumers want and support an industry which is proving to be a real asset to British business by rebalancing the UK’s excessive duty rates in this year’s Budget.”

He continued: “Following Brexit’s impact on the pound, and rising inflation, the wine and spirits trade has faced a tough trading landscape. 

“A cut or freeze will save great British wine and spirits businesses - which support over 550,000 jobs – thousands of pounds, which can help businesses to invest, grow and create even more jobs.”

Related topics: Spirits & Cocktails, Wine

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