[Insert Business Name] calls on Chancellor to support wine and spirits industry with a 2% duty cut

  • Independent economic modelling shows cut could boost wine and spirits industry by £2.9bn and Treasury revenues by £368m
  • Cut would save UK’s 38m wine drinkers 10p per bottle and 31m spirits drinkers 55p per litre
  • Call follows Prime Minister’s plea to build a stronger economy and empower UK business.

[Insert Location] based business, [Insert Business Name], is calling on the Chancellor to support its industry with a 2% duty cut in this year’s Budget. The company, which employs [Insert Employee Numbers] has called on its local MP, [Insert MP Name], to support its call for fairer duty rates and to lobby the Chancellor on its behalf.

Independent forecasters have predicted that this modest drop would allow the wine and spirit sector to contribute a further £2.9bn in economic activity to a record breaking level of £52.6bn.
The cut would also help to boost the Chancellor’s coffers by a further £368m as the industry grows and revenues increase according to EY. These calculations are backed up by a recent duty cut success story. After a freeze in wine duty in the 2015 Budget, wine duty income increased by £136m (+3.6%) the following year and after a 2% cut in spirits duty that year, spirits duty income increased by £124m (+4.1%) over the same period.
The UK’s wine industry is at the centre of the global wine trade and incudes a sparkling English wine sector that is already exporting to 27 different countries.

The UK spirits sector is one of Britain’s most valuable exports with a booming British Gin industry which topped £1bn of UK sales for the first time last year.

Overall the wine and spirit industry support over 550,000 jobs across the U.K. in vineyards, distilleries, bottling plants and logistics companies.
The call comes as UK wine businesses particularly are reeling from the triple impact of historically high duty rates, higher inflation and the devaluation of the pound. This will hit the wine industry with at least £594m in further costs as the UK currency continues to slide against key markets such as the US Dollar, the Euro and Australia Dollar.

Last year the WSTA warned that currency fluctuations could lead to wine prices going up by an average 29p per bottle. Meaning that any increase in duty, on top of the post-Brexit Sterling devaluation, could have dire consequences on Britain’s wine trade.
The cut would also come as welcome relief to the UK’s 38m wine consumers and 31m spirits consumers as it would knock off 10p on a bottle of wine and 55p from a litre of spirits compared to an inflationary rise, expected to be at around 3%. Consumers are already paying a staggering 55% of the average bottle of wine on duty and VAT and 76% for the average bottle of spirits and anger at this showed in recent polling where 62% of the public said wine duty was too high and 70% said that spirits duty was too high.

Theresa May this week called for Brits to face “no new barriers to living and doing business” and let out a rallying cry for a “better deal for ordinary working people at home.”

The PM made set out a 12-point plan for leaving the EU vowing to “take this opportunity to make Britain stronger”.

[Insert Name], Chief Executive of [Insert Business Name] Said:

“Wine and spirits businesses like our, as well as our consumers, face a staggeringly high tax bill and, at a time when costs are rising and the industry is looking to meet the new challenge that Brexit brings, there has never been a more important time for the Chancellor to listen to the concerns of businesses like ours.

As a local employer we want to ensure that our MP and the Government understand our concerns and listen to the evidence which shows that the small duty cut would provide a big boost to our industry, nationally and locally.”

Miles Beale, Chief Executive of the UK’s Wine and Spirit Trade Association said:

“There is one way Theresa May’s Government can ‘empower’ British business almost immediately, and that is to support our industry with a 2% cut in wine and spirits duty at the next Budget. This would strengthen British business, give consumers a better deal and benefit the Chancellor too.
The Government’s Budget will have a profound impact. Not just on the wine and spirits industry but the workers within it and to the consumers who enjoy it. This is why we are telling the Chancellor the message is clear cut, it is time for him to be bold and back British business with a cut in wine and spirits duty.”

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Notes to editors:

Wine and spirits duty facts
- Wine businesses and consumers pay £4bn in duty and duty and spirits businesses and consumers a further £3.2bn.
- The duty on a bottle of wine is £2.08, meaning that 55% of the cost of the average bottle in shops and super markets is taken up in tax and VAT.
- The duty on a 70cl bottle of spirits is £7.26, meaning that 76% of the cost of the average bottle of spirits in shops and supermarkets is taken up by duty and VAT.
- Duty rates for wine have increased by 56% since 2007 and spirits duty rates have increased by 41%
- Compared to an inflationary rise of 3%, a 2% cut in duty would be worth 10p for a bottle of wine, 13p for a bottle of sparkling wine and 55p for a litre of spirits
- UK businesses and consumers pay the 4th highest duty rate for spirits in the EU accounting for a quarter of all Spirits Duties (27.29%).
-UK businesses and consumers pay the 3rd highest duty rate for wine in the EU accounting for 68.4% of all duties collected by member states
The EY modelling revealed that 2% cut would:
· Increase overall economic activity in the wine and spirit sector by £2.9bn (+6%).
· Increase overall revenues to the Treasury by a projected £368m (+2%).
· Increase industry contributions to the UK’s GDP by a projected £1.6bn (+6%).

The WSTA is the UK organisation for the wine and spirit industry, representing over 300 companies producing, importing, transporting and selling wine and spirits. The WSTA works with its members to promote responsible production, marketing and sale of alcohol.

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