UK: Drinks trade slams stealth duty rise in UK
The spirits industry in the UK has attacked the latest duty increase introduced in the country in an attempt to ward off the global economic crisis.
The UK Chancellor of the Exchequer, Alistair Darling, yesterday announced an 8% rise in the duty on alcohol in the country, to match a reduction in value added tax (VAT) from 17.5% to 15%. According to the Scotch Whisky Association, the rise will add another GBP0.29 (US$0.44) on to a standard bottle of Scotch in the UK, following a GBP0.59 tax increase announced in March.
"There is no logic to any duty increase," said the SWA's CEO, Gavin Hewitt. "Alcohol revenues have already fallen by GBP40m this year on the back of the 9% excise rise in March. The Treasury is likely to lose more revenue at a time when it needs every penny."
The director general of the Gin and Vodka Association, Edwin Atkinson, echoed Hewitt's sentiments. "The Chancellor cannot have it both ways," he said. "If he wants more revenue, he will not achieve it by increasing taxes.
"This unplanned duty change coming at such short notice before Christmas will hit businesses very hard but the smaller traders without credit capacity will find life particularly difficult."
Meanwhile, Mark Hastings, director of communications at the British Beer and Pub Association, described the increase as "truly staggering", warning that, "with pubs closing at record rates and beer sales at their lowest since the Great Depression, this sector needs a fiscal stimulus just as much as the rest of the economy.
"There is genuine dismay and disbelief that the Chancellor is turning a deaf ear and a blind eye to the economic plight of Britain's traditional beer and pub sector."
The latest duty rise, added to the temporary VAT cut, translates into a 4% increase in tax on a bottle of whisky, the SWA noted.
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