The WSTA Market Report published today (Tuesday, Sept 12th) reveals the impact of the triple whammy price hike – with the average priced bottle of wine, sold in shops following the March Budget, hitting £5.58, up 4% on last year.
Sales of wine in our pubs, bars and restaurants show an average priced 175ml glass of wine has increased 21p compared the same period last year.
These latest figures, published on the day of the WSTA annual Conference, take into account sales between the 26th March and the 17th June 2017. They capture alcohol sales for the three months following the Budget and show the trading landscape almost a year on from the vote to leave the EU.
For the first time we can see the how prices have been affected by the triple whammy resulting from Brexit’s impact on the pound, rising inflation and the 3.9% inflationary duty rise on alcohol imposed by the Chancellor at his Budget in March.
Total volume sales of alcohol across both the on and off trade are down for the fourth quarter in a row.
This coincides with a rise in the price of all alcohol products sold in shops, compared to the same time last year. And a rise in the price of most alcohol sold in pubs, bars and restaurants, with the exception of sparkling and fortified wine.
The pain is set to continue for Brits who enjoy a tipple as well as for the wine and spirit industry, which supports over 550,000 UK jobs, as duty increases are planned in the autumn budget which will be the second rise this year.
At the last Budget the Chancellor announced “no change” to alcohol taxation policy – meaning alcohol duty will increase, year on year, in line with RPI inflation for the duration of this parliament.
If this position holds in the Autumn Budget then wine duty will go up by another 8p a bottle, spirits 29p and beer will increase 2p a pint.
Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:
“The inflationary duty rise on alcohol – at a painful 3.9% – inflicted in the March Budget came on top of the effects of Brexit: the fall in the value of the pound, compounded by rising inflation.
The latest WSTA Market Report shows that consumers are well and truly feeling the effects of the triple whammy.
“But I am sad to say the pain doesn’t end here. The Autumn Budget is set to see alcohol duty rise by inflation once again. Unless Government starts showing support for our under-valued alcohol industry, in November we’ll find ourselves on the end of a further blow to follow up the triple whammy combination already dealt out to our industry this year. We need a time out from excise duty increases.
“The YouGov poll published in the WSTA Market Report reveals consumers’ unease at creeping costs, with 80% of people polled expressed their concern over the prospect of paying higher prices, up from 71% in February. It is time for the Chancellor to act positively by addressing the wine and spirit industry’s historically high and deeply unpopular duty levels.”
Following the EU Referendum in 2016 the UK wine industry has done its best to absorb rising import costs, but as predicted it was only a matter of time before any cushioning against the effects of a weaker pound ran out and costs were passed on to the consumer.
In three months to June the WSTA revealed that an average priced bottle of wine was at an all-time high, coming in at £5.56.
56% of the cost of the average bottle of wine is taken up in tax, including £2.16 tax and 92p VAT. Duty rates are even higher on products like English Sparkling wine at £2.77 a bottle.
Fourteen countries in the EU have zero rates for wine and therefore only 21% of a bottle of wine sold in France or Spain is taken up in tax and 19% in Germany.