WSTA: 'It’s not too late for Gov to scrap crippling duty hikes'

By Rebecca Weller

- Last updated on GMT

Crippling hikes: increase to alcohol duty will leave SME's most at risk (Credit: Getty/Sykono)
Crippling hikes: increase to alcohol duty will leave SME's most at risk (Credit: Getty/Sykono)

Related tags Wine and spirit trade association Finance Government Legislation

SMEs will be “most at risk” when “crippling” duty hikes come into force next month, the Wine and Spirit Trade Association (WSTA) has stated.

As of Tuesday 1 August, the duty on a bottle of still 12.5% ABV wine will increase by 20%, from £2.23 to £2.67, increasing to 44% for fortified wines such as Sherry or Port over 15% and 20% ABV respectively, as per data from the WSTA.

Spirits are also set to be hit hard, with duty on a 75cl bottle of 37.5% ABV vodka predicted to see a 10% upswing, from £7.54 to £8.31.

However, WSTA chief executive Miles Beale implored the Government to consider abandoning the increases, stating “it’s not too late to scrap crippling duty hikes”.

Most at risk

Beale said: “Tax hikes and other costs, including a prolonged cost of living crisis for consumers, persistently high inflation – especially for food and drink - and rocketing prices for glass, are leaving little room for many businesses to turn a profit.

“Inevitably some won’t be able to stay afloat, with SMEs most at risk.

“For the hospitality sector, which is still trying to re-coup huge losses from the pandemic as well as facing massive energy bills and business rates, the duty changes could not have come at worse time.”

From August, all alcohol will be taxed by strength, meaning a reduction in availability and choice with price rises predicted to impact 90% of wines sold in the UK.

Additionally, the spirits category faces a similar challenge as premium products such as gin, vodka and whisky must contain a minimum strength prescribed by law, the association stated.

Extremely tough

The WSTA also claimed this would be the biggest single increase to alcohol duty in almost 50 years and go against the Government’s fiscal policies intended to control inflation, instead fuelling it further.

Beale added: “We are careering towards an extremely tough period for wine and spirit businesses.

“Ministers have elected to pile on a double-digit inflationary increase at the very same time they change the alcohol taxation system, introducing complexity and an additional large duty rise.

“Businesses are doing their best to adapt, but there is no choice than to pass on these huge increases to customers.”



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