A 2% cut in duty on wine and spirits would give Chancellor George Osborne a £1.5 billion boost to the public finances in 2015, new industry analysis by EY has today revealed.
The Wine and Spirit Trade Association (WSTA) and Scotch Whisky Association (SWA) will launch on 15 December their ‘Drop the Duty!’ campaign, calling for a 2% cut in alcohol duty at the next UK Budget in March 2015.
Mobilising the public
The ‘Drop the Duty!’ campaign, supported by the TaxPayers’ Alliance, aims to raise awareness of the extremely high rate of tax UK consumers currently pay and mobilise the public to take action.
UK consumers currently pay nearly 80% tax on an average priced bottle of spirits and almost 60% on an average priced bottle of wine. On a category basis, that means 78% tax on whisky (£10.06 on an average bottle); 79% tax on gin (£10.03 on an average bottle); 76% on vodka (£9.48 on an average bottle); and 56% tax on a bottle of wine (£2.93 on an average bottle).
A 2% cut in duty would boost public finances by £1.5bn through increased investment across the industry; greater tax income from corporation tax and VAT; and from the benefits of jobs created in pubs, bars, restaurants, shops and the wider supply chain.
Key findings of the EY report
* A 2% duty cut would increase the wine and spirits industry’s contribution to economic activity by £3.9bn, from £46.6bn to £50.4bn.
* The industry’s direct contribution to UK Gross Domestic Product would increase by £0.9bn, from £11.8bn to £12.7bn.
* The wine and spirit industry directly or indirectly supports around 518,000 jobs in the UK in 2014, with the majority (69%) directly dependent on the industry’s activity.
Small drop, big cheer
Using the strapline, ‘Small drop, big cheer’, the ‘Drop the Duty!’ campaign is calling on all UK consumers to take action and speak out about the unfair level of tax by emailing their MP via the campaign website to urge George Osborne to make this modest 2% cut in duty across all alcohol products in Budget 2015.
The Punch Tavern on Fleet Street has, for the launch day only, transformed into ‘George’s World’ where everything is done in line with the wishes of Chancellor George Osborne in order to highlight the inequality UK businesses and consumers face.
£3.9 billion greater economic contribution
Miles Beale, chief executive of the Wine and Spirit Trade Association, said:
“The wine and spirit sector already makes a significant contribution to the wider hospitality industry and to the British economy. Independent analysis from EY shows that the sector’s economic contribution could be £3.9 billion greater if it weren’t for the UK’s sky-high duty rates.
“By cutting the duty on wine and spirits at the next Budget the Chancellor would provide welcome relief for the British public, boost jobs and growth and generate an additional £1.5bn for the public finances.
“It is important that the Chancellor hears this message directly from consumers, so I am encouraging all our supporters to make their voice heard by joining the ‘Drop the Duty!’ campaign and emailing their MP at www.droptheduty.co.uk.”
David Frost, chief executive of the Scotch Whisky Association, said:
“If you buy a bottle of Scotch Whisky to celebrate Christmas and New Year, nearly 80% of the average price you pay goes straight to the Government. This is unfair on both consumers and the Scotch Whisky industry. We are calling for George Osborne to do the right thing and cut excise duty by 2% in next year’s Budget.
“New evidence shows that lowering these draconian levels of excise duty would actually boost public finances and the economy, as well as benefit consumers.”
For more information about ‘Drop the Duty’ click here
Follow us on Twitter @droptheduty
About the WSTA
The Wine and Spirit Trade Association (WSTA) is the UK organisation for the wine and spirit industry representing over 340 companies producing, importing, transporting and selling wines and spirits. The WSTA works with its members to promote the responsible production, marketing and sale of alcohol.
About the SWA
The Scotch Whisky Association is the industry’s representative body and promotes the long-term, global interests of Scotch Whisky as a high quality spirit drink, of its 57 member companies, and the Scotch Whisky industry overall.
About the TPA
Founded in 2004 by Matthew Elliott and now with 80,000 supporters, the TaxPayers’ Alliance (TPA) fights to reform taxes, cut spending and protect taxpayers.