The Wine and Spirit Trade Association:

WSTA  Budget Report 2018

The Government will freeze planned RPI duty rises for spirits, beer and most cider. Duty on most wine and higher strenght sparkling cider will rise by RPI inflation (3.1%) from 1st February 2019.

This means:

  • Duty on a 750 ml bottle of wine will go up 7p to £2.23
  • Duty on a 750 ml bottle of sparkling will go up 9p to £2.86
  • Duty on a 750 ml bottle of fortified wine will go up 9p to £2.98
  • Duty on a 70 cl bottle of vodka at 37.5% will remain at £7.54
  • Duty on a litre bottle of vodka at 37.5% will remain at £10.78
  • Duty on a 700 ml bottle of gin at 40% % will remain at £8.05
  • Duty on a litre bottle of vodka at 40% will remain at £11.50

The government will review the current Small Brewers Relief to ensure it is supporting growth in the sector.
As announced at Autumn Budget 2017, the government will introduce a new duty band for still cider and perry from 6.9% to 7.5% alcohol by volume (abv), to target white ciders. This will be
legislated for in Finance Bill 2018-19, and a rate of £50.71 per hectolitre will apply from 1 February 2019.
Following a review by HMRC launched at Autumn Budget 2017, the government will legislate to ban post duty point dilution from April 2020.

Budget 2018: WSTA’s reaction

Miles Beale, Chief Executive of the WSTA said:
“We welcome the Government’s decision to freeze duty on spirits, which will support this great British sector to invest, grow and create jobs – as well as supporting the public finances through
increased revenues. However, the decision by the Chancellor to increase wine rates significantly is a hammer blow to this great British industry. It actively undermines a sector that has been hardest hit since the Brexit Referendum and will be thoroughly unwelcome for the 33 million consumers of the nation’s most popular alcoholic drink.
This inflationary rise is grossly unfair, unjustified and counter-productive. The UK is the world’s biggest wine trading nation and, as such, deserves government’s support, not punishment.
The wine industry is, unfortunately, no stranger to harsh treatment from Chancellors. Since 2012 wine overtook beer as the largest contributor to the public purse through duty payments, and
no alcoholic drink has paid more to the Treasury since then. Today’s announcement means that only twice since 2003 that Chancellors from either party have showed their support to an industry
employing some 190,000 people across the country. By increasing the UK’s already excessive duty rates the Chancellor will clobber wine importing businesses, including thousands of SMEs; stifle growth of our flourishing English wine industry and; raise prices for consumers.”

 

The Chancellor announced a range of other business related matters including:
  • The OBR expects the UK economy to continue to grow in every year of the forecast, and has
    revised up its forecast for cumulative growth compared to Spring Statement 2018. The OBR
    forecasts that GDP will grow by 0.5% in Q3 2018 and 0.4% in Q4 2018, and expects annual
    GDP growth of 1.3% in 2018 and 1.6% in 2019. GDP growth dips slightly to 1.4% in 2020 and
    2021, and then increases to 1.6% by 2023.
  • The Chancellor announced a freeze to fuel duty for the ninth consecutive year.
  • The government is introducing a digital services tax, ensuring large multinational businesses
    make a fair contribution to supporting vital public services.
  • To incentivise manufacturers to use recycled plastic, the government announced it will:
    – introduce a tax on the production and import of plastic packaging from April 2022. Subject
    to consultation, this tax will apply to plastic packaging which does not contain at least
    30% recycled plastic, to transform financial incentives for manufacturers to produce more
    sustainable packaging.
    – reform the Packaging Producer Responsibility System, which will aim to increase producer
    responsibility for the costs of their packaging waste, including plastic. This system will provide
    an incentive for producers to design packaging that is easier to recycle and penalise the use
    of difficult to recycle packaging, such as black plastics.
  • The OBR has announced next year’s RPI increase of 3.1% The OBR Economic and Fiscal
    Outlook can be viewed here: https://cdn.obr.uk/EFO_October-2018.pdf

 

Further information
✴ Full Budget 2018 documents – https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752202/Budget_2018_red_web.pdf

 

Contacts
Freddie Joosten, Parliamentary Affairs Manager
✉  freddie@wsta.co.uk
☎ +44 (0)20 7089 3862
Tom Pratt, Communication Manager
✉  tom@wsta.co.uk
☎  +44 (0)20 7089 3874

 

 

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