Wine Industry Rejoices at Budget Announcement
Posted on Sat 21st May 2016 at 11:57
The Drop the Duty campaign, run by the Wine and Spirits Trade Association, has borne fruit: in the recent budget Chancellor George Osborne announced that: “to support the UK’s growing wine industry, the duty on wine will be frozen”.
This announcement comes after months of lobbying by the WSTA, which has been urging the industry to take action on this business–critical issue. The campaign proved hugely popular, and large numbers of the trade had personally taken the time to lobby their local MP, warning them that increasing alcohol duties was damaging a growing and important part of UK business. Miles Beale, the chief executive of the WSTA, was pleased with the result: “this is a significant improvement on last year. The language the Chancellor used is really encouraging. It gives us confidence that we have made the business case about wine duty rates in the UK.” The WSTA will now be writing to all MPs who supported the Drop the Duty campaign to thank them.
Yet, compared to other drinks such as spirits and beer, one could argue that wine hasn’t been given that good a deal. As Andrew Bewes, managing director of Hallgarten Druitt & Novum Wines said: “We have fully supported the WSTA’s ‘Cut the Duty’ campaign over the past few months and are therefore disappointed that the Chancellor has chosen not to cut duty on wine in line with beer, cider and spirits." Beer duty has, for example, been cut by a penny per pint in this budget. One explanation for the discrepancy may be that the government predicts a strong future for wine, as explained by the Office for Budget Responsibility after Osborne’s statement: "after strong growth in wine clearances in the previous decade, clearances in the past few years have been broadly flat. We now assume that wine consumption will grow in line with overall consumer spending over the forecast period". The OBR further predict improved receipts from wine sales in the coming year, but whether increased consumer spending will be seen across the industry is in doubt.
Regardless, this is still a well-deserved victory for the WSTA and all those who lobbied so hard, and one we should all celebrate.