Alcohol Duty Review evidence call welcomed by trade

02-Oct-2020 - Last updated on 02-Oct-2020 at 10:00 GMT

New plan: “the existing EU framework is unnecessarily complex," says WSTA boss Miles Beale

The Government’s launch of the Alcohol Duty Review call for evidence has been welcomed by trade bodies.

This looks for views on how well the alcohol duty system currently works and how it could be reformed. Now the UK has left the European Union (EU), this is an area the UK can set its own law on.

The review looks at whether the method alcohol taxation should be standardised, the duty categories should be changed or unified, products should be consistently distinguished by strength and if distinctions should be made based on the place of retail.

It considers if small producer reliefs should be extended or standardised, duties could be uprated for inflation in a more consistent way, a single process for approvals, declarations and payments should be introduced and if more could be done to tackle avoidance and evasion of duty.

Devastating impact

British Beer & Pub Association (BBPA) boss Emma McClarkin said: “We welcome the call for evidence under the Alcohol Duty Review. The Government now has the opportunity to set out how it will back Britain’s world-renowned pubs and breweries, which support 900,000 jobs, contribute £23bn to the economy and play such a vital role in local communities throughout the UK. Our sector needs more support to help it recover from the devastating impact of Covid-19.

“Now we have left the EU, now is our opportunity to create a more level playing field compared with other major beer producing countries and support our British brewers. We pay 11 times more beer duty than Germany or Spain. As part of this review we will be urging the Government to support and foster growth of our world-renowned pub and brewing industry just as other Governments of great brewing nations do.”

Wine and Spirit Trade Association (WSTA) chief executive Miles Beale also welcomed the Government’s call for evidence to inform a review of the UK alcohol taxation, now the UK has left the EU.

Unnecessarily complex

He said: “The UK’s wine and spirits sector generates almost £50bn a year in economic activity, supporting some 360,000 jobs and contributing a huge £17bn to the public purse. The current excise duty regime is complex and fails to support UK consumers, UK businesses - especially small and medium-sized enterprises (SMEs) - or the Exchequer.

“The existing EU framework is unnecessarily complex; and has created a distorted market and an uneven competitive playing field. Any new system needs to be both simpler and fairer to all products than the current one. This would benefit UK consumers, support business growth and increase revenue to the Exchequer.

“As the largest and most broadly based UK trade association, the WSTA is well-placed to contribute to a review that should consider the operation of the whole of the excise duty system for alcoholic drinks, not just product rates.

“A thorough review will take time to complete and then implement. We have some concerns about businesses’ capacity to contribute given a deadline at the end of November, which falls during the period including the vast twin challenges for Autumn 2020: one of the most important Christmas trading periods in modern times and preparations for the end of the Transition period. But we note that this call for evidence is only the first phase and that there will be future opportunities for respondents and stakeholders to contribute.”