The beer and spirit industries are hopeful for another year of duty freezes, while the wine sector looks for a levelled playing field ahead of Philip Hammond’s Autumn Statement.
Earlier this year, George Osborne froze the duty rates on beer, spirits and most ciders, but most wines and higher strength sparkling cider were set to go up, with prices generally increasing by about 4 pence.
Here’s what the beer, wine and spirit industries are hoping for this year.
Hold the freeze, please
The future looks bumpy for pub owners, even after this year's beer duty freeze.
The Campaign for Real Ale (CAMRA) is calling on the government to maintain the freeze, saying the effects of the beer duty escalator from 2008 to 2013, which resulted in the closure of thousands of pubs, are still being felt across the sector.
Pubs will have enough on their plates with increased business rates, pension auto-enrolment and a higher national living wage, said Colin Valentine, national chairman of CAMRA.
A beer duty increase would stifle the recovery the industry is seeing, said Brigid Simmonds, chief executive of the British Beer and Pub Association.
The beer duty still accounts for up to 50 per cent of the costs of a UK brewer, and about a third of the price of a pint goes to the exchequer in duty and VAT, Simmonds said.
The beer duty in the UK is considerably higher than that of all other major European brewing nations, she added.
UK beer drinkers pay about 52.2p more for each pint than other leading beer drinking nations, Valentine said, because of the high duty.
Save money by tieing up the illicit trade “tax gap”
High taxes on alcohol and tobacco have cost the Treasury more than £31bn in tax revenue between 2010 and 2015, the TaxPayers’ Alliance reported.
The analysis of HMRC figures found that high taxes fuelled illicit markets, with £5.8bn lost to the black market in spirits and £3.5bn in wine.
The difference between the amount due and the amount collected, or the “tax gap”, could fund a 1.5p cut in the basic rate of income tax, the report found.
Level the playing field for wine
The UK wine industry has experienced a “huge growth success story”, according to Tim Loughton, MP and chair of the All Parliamentary Wine and Spirit Group.
Wine was the only alcoholic drink to receive a duty rise this year, he said, and the duty on wine has risen sharply over the last decade—from £1.33 per average bottle in 2007 to £2.08 currently.
“If wine continues to go unnoticed and unprotected by Government, there will be a growing impact on the industry right across the board, from small to large producers,” Neil Parish, MP and chair of the Environment, Food and Rural Affairs Committee said.
On an average bottle of supermarket wine, 55 per cent of the price is made up of wine duty and VAT, the Wine and Spirit Trade Association (WSTA) reported.
And UK wine drinkers are paying 67 per cent of all wine duties collected by EU member states.
“Added pressures faced by wine consumers and businesses through high taxes and the impact of Brexit mean now is the time to act,” Miles Beale, chief executive of WSTA said.
Better business rates for pubs
The British Beer and Pub Association set out a list of priorities that would reduce the impact of revaluation and support the pub sector across the country:
An increase in the upper threshold for small business rate relief, from £15,000 to £20,000
A mandatory 50 per cent reduction for businesses listed as an Asset of Community Value, funded by the relevant local authority, to recognise the community benefit of the property
The earlier introduction of the consumer price index uprating of the multiplier to April 2017
The introduction of transitional rate relief from April 2017, with better transitional relief for pubs in London and the South East, with support from the Mayor of London and local authorities
A new pub-sector relief scheme to be introduced by April 2018
- Reform of rural rate relief which prevents some pubs fully benefiting from small business rate relief changes.