Total duty receipts on wine are expected to increase 54% over the next 6 years, with the duty rate increasing by 4.4% pa on average, according to the Wilson Drinks Report.
The Wilson Drinks Report has repeatedly warned that receipts on wines and spirits would significantly increase over the next few years, despite an overall reduction in the total amount of alcohol being consumed in the UK.
The Chancellor’s Autumn Statement was accompanied by updated forecasts of the UK economy by OBR, the Office for Budget Responsibility, which is independent of the Government. Included in the detailed supporting tables are OBR predictions on the total amount of receipts from duty on beer, wines and spirits.
The latest OBR forecast shows increases in total duty receipts between 2012/13 and 2018/19 as follows:
- Beer/cider + 0%
- Wines +54%
- Spirits +31%
Over the same period, the OBR expects wine volumes to increase 19%, spirits volumes to increase by 1% but beer volumes to fall back a further 15%.
Tim Wilson, Managing Director of WDR, said:
“We expect that the Chancellor will continue to implement the duty escalator on wines and spirits over the remainder of this parliament, and beyond. The level of increase in the predicted total duty receipts is proof of this. Wine duty would need to increase by 4.4% each year on average to achieve the estimated level of duty receipts by 2018/19.
“Despite volumes of still wine being in steady decline at the moment, wine duty receipts are expected to increase by 54% between 2012/13 and 2018/19. This is because HM Treasury believes that economic growth will be accompanied by large increases in the sales of wine.”