Warns a cut is only possible with an unprecedented effort from the industry
Challenges every UK wine business to lobby MP to avoid wine being singled out
The Wine and Spirit Trade Association (WSTA) has launched its 2017 Budget effort by calling for the Chancellor to back British businesses with a 2% cut for wines and spirits. To support its effort the WSTA has published new economic modelling that a 2% cut would boost the wine and spirits industry economic contribution by £2.9bn and also increase Treasury revenues by £368m.
However, they have issued a specific challenge to the wine industry to get involved in this year’s effort or risk being singled out yet again for worse treatment by the Chancellor. Wine was the only product singled out for inflationary rises in the 2016 Budget and the year before in 2015 it was the only product not to receive a 2% cut. The WSTA is warning the industry that without action there is a chance it will be left out again. With higher inflation, the impact of the devaluation and the potential for duty increases, the wine industry faces a potential triple whammy that will be devastating for the trade in 2017.
In a letter to all its members the WSTA, which has previously run campaigns leading to the scrapping of the unpopular duty escalator for Wine in 2014 and a freeze in 2015, has said that the Government will only listen this year if there is an unprecedented level of concerted action by the wine trade. Its new report also highlights that currency devaluations could hit the wine industry with up £594m in additional costs.
The WSTA has therefore developed a Budget support pack which it is sending to all its 300+ members with the aim of supporting them to contact and lobby their local MP. The WSTA see wine businesses as being a vital part of the effort this year as they look to build up understanding of the importance of the industry to the UK. A 2% cut in duty would be worth 10p for a bottle of wine, 13p for a bottle of sparkling wine.
The pack will also be going to its spirits members, which still face the highest level of duty of any product. The research suggests that a cut could provide a boost to the UK’s 233 distilleries of on average £685,000. Compared to an inflationary rise of 3% it would be a saving worth 55p for every litre of spirits produced.
Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:
“Politicians will need to see first-hand the breadth and value of the industry to the UK if they are to understand the positive impact a 2% duty cut can have for our businesses, consumers and – perhaps surprisingly – the Treasury. The only way they can do this is if businesses themselves engage directly with their local representatives.
“On top of the UK’s very high excise duty, wine has been singled out for worse treatment for a number of years and has been hit with historic duty rises of 56% since 2007. It now faces the triple threat of the pound’s devaluation, rising inflation and further duty rises. It is vital each and every wine business gets involved and raises these issues with their MP.”
“We believe with an unprecedented and concerted effort by the industry we can convince the Chancellor to make the right choice to back British businesses and make the cut.”
The WSTA’s pack will be sent out to its members and the team will be supporting businesses by helping them identify their local MP and providing data to support the effort.