UK: Minister backs WSA stance on taxation
At a pre-Budget meeting with the Wine and Spirit Association (WSA), Treasury Minister John Healey MP has agreed that binge drinking should not be tackled through tax rises, the WSA said in a statement yesterday.
With the Strategy Unit due to make its recommendations on alcohol harm reduction within weeks, the Association welcomed the remark.
Quentin Rappoport, WSA director, said: "We were heartened by the Minister's comments on social issues as we have put forward considerable evidence which shows that high excise duty is not a curb on alcohol misuse. Indeed, there are many examples around the world - such as Scandinavia - which suggests that the opposite is true."
Healey also agreed that the historical excise surcharge on sparkling wine is illogical, leading the WSA to believe that a gradual alignment of duty of still and sparkling wine could be possible.
"We would hope that this wouldn't be via increases on still wine duty, but rather through a decrease in the 'bubble tax'," said Rappoport.
In support of its argument for reductions in duty, the WSA presented evidence to show that sales in categories affected by duty increases in 2003 (such as still wine) had been adversely affected, whilst those where duty was frozen (spirits and sparkling wines) did well.
"After many years of good growth, the wine market has weakened with Christmas trade only up two percent by volume despite aggressive marketing," said Rappoport. "With margins low and volumes hardly rising, any increase in the tax burden would be disastrous for the trade," he added.
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