UK: WSA calls for duty cut in budget
The UK's Wine and Spirit Association (WSA) has delivered its pre-Budget Submission to HM Treasury this week.
In a statement the Association said it had called for a freeze - or ideally a reduction - of excise duty on still wine and is looking for stable duty rates for several years to come.
It added that it is seeking the immediate abolition of the 42p per bottle surcharge on sparkling wine. It also made the point that tax increases would not be an appropriate measure against alcohol misuse as they penalise all drinkers, the vast majority of whom consume alcohol sensibly.
"Owing to the consumer resistance at price points, duty increases often aren't passed on to consumers, which damages trade by squeezing margins and reducing investment in brands. This is now evident from sales growth, which has slowed dramatically in the still wine sector," said Quentin Rappoport, WSA director.
Rappoport added: "Sparkling wine duty has been frozen for the past two Budgets but it's time it was brought into line with still wine with immediate effect, as recommended by the European Commission. Austria has done so recently and Germany is considering its position; the time has come for Britain to follow suit."
The WSA also asserted that raising duty levels will not curb alcohol misuse, and in fact would exacerbate the problem. It refered to a study showing that the price elasticity of binge drinkers is higher than that of sensible drinkers, and also references the fact that high tax countries - such as Scandinavia - have more problem drinkers than low tax, Mediterranean countries. It also noted that the UK is one of very few high tax EU countries not to have cut excise duty rates dramatically in the past few years.
The Association also used its Budget Submission as an opportunity to state its members' position on so-called 'voluntary funds', being suggested as part of the Government's plans to reduce binge drinking.
"It is apparent that what is being proposed is really a levy - a hypothecated stealth tax - which we believe is inappropriate. The industry gives large amounts of money to organisations such as the Portman Group and contributes £14bn to the Exchequer in excise taxes," said Rappoport. "Education and effective self-regulation are the way to change our drinking culture, not ever higher taxes."
Lastly, the WSA called upon the Government to provide much needed funding for new facilities at Plumpton College to enable it to offer a BSc in Viticulture and Oenology and foundation degrees in Wine Business and Wine Production. This would address the shortage of trained winemakers which is inhibiting the growth of the internationally-recognised quality English and Welsh wine market.
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