Encirc backing calls for cut to alcohol duty in Spring Budget

February 2024
Encirc Managing Director Sean Murphy.

Encirc, a Vidrala Group company, is backing calls for the Chancellor Jeremy Hunt to cut alcohol duty at next week’s Spring Budget to boost UK drinks businesses after alcohol inflation has trebled in the last 14 months.

The Wine and Spirit Trade Association has led the campaign calling on the Chancellor to cut wine and spirit duty to combat both falling sales volumes and reduced revenue to the Exchequer. They put forward a submission to the Treasury recently arguing the case for a reduction.

In January last year alcohol inflation was 3.5%, it’s now almost trebled, with spirits at 8.9%, wine at 7.8% and fortified wine sitting at 18.7%.

Wine duty was last cut in 1984 when Nigel Lawson was Chancellor. Spirit drinkers haven’t enjoyed the benefits of a duty cut since 2015, under the last Coalition Government.

The WSTA argues that the only way to cut alcohol inflation is to cut excise duty following the disastrous duty hikes last year.

Encirc’s Managing Director, Sean Murphy said: “Wine and spirits drinkers have been getting hit hard in the pocket over recent years, with significant alcohol inflation. Last year we saw a staggering increase in excise duty, with a 20% hike on still wine.

“We believe it is time for a different approach. Wine duty has not seen a cut in 40 years, with no cuts in spirits duty in almost a decade. We hope the Chancellor will see that a duty cut is urgently needed.

“We fully back this WSTA campaign and hope Government and Treasury look at ways to stimulate demand rather than adding further costs to the consumer, fuelling inflation. Increased demand will increase duty income, while easing the burden on consumers and UK drinks businesses.”

Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said: “Last year’s duty increases have had an immediate and negative impact on wine and spirit sales volumes. Not only has this hurt British businesses, it has fuelled inflation and reduced excise duty receipts.

“Recent history has shown that cutting excise duty leads to increased sales, keeps price rises down for consumers and brings more revenue into the Exchequer. We are calling on the Chancellor to check the records and take action that will benefit Treasury coffers, British business and consumers – cut duty rates and give everyone a much-needed boost.”

Encirc, owned by the Spanish based Vidrala Group, believes a cut in duty would be a timely boost for all the industry after some challenging years not least the oil and energy price crisis that followed hot on the heels of the Covid-19 pandemic.

‘We believe it is time for a different approach. Wine duty has not seen a cut in 40 years, with no cuts in spirits duty in almost a decade. We hope the Chancellor will see that a duty cut is urgently needed’

Sean Murphy

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