UK Spirits Alliance Warns of Harm to British Businesses with Further Increase in Alcohol Tax
Distillers in the UK are expressing concerns over the impact of a recent 10.1% increase in alcohol duty, with fears that another tax rise may be on the horizon. The UK Spirits Alliance (UKSA) has warned that the continuous rise in costs is making it difficult for distillers to stay afloat and that the industry is struggling to recover from the effects of the Covid pandemic.
According to a recent survey conducted by the UKSA, 54% of distillers reported that they have either not fully recovered or only partially recovered from the impact of Covid. Additionally, 70% fear that their ability to invest in business improvements, including production capacity and innovation, will be hindered by the increase in duty. Furthermore, 43% of distillers believe that the rising duty rate will have a negative effect on their staffing levels.
In anticipation of the Chancellor’s Autumn Statement, the UKSA has submitted a plea to the Treasury, urging for a fair approach across the entire industry. They are calling for a freeze on duty for all alcoholic beverages, rather than just beer and cider. The UKSA argues that the current approach, known as the Brexit Pubs Guarantee (BPG), not only fails to adequately support pubs, bars, and restaurants, but also penalizes adult customers who prefer drinks such as gin and tonic or a spritz over beer or cider.
Under the BPG, the government has promised that the duty paid by pubs and bars on these specific drinks will always be less than that paid by retailers. This means that the duty on each draught drink, such as pints of beer and cider, will be up to 11p cheaper in pubs and bars compared to supermarkets.
Over four hundred spirits businesses recently penned an open letter to Chancellor Jeremy Hunt, expressing their concerns about the impact of the August increase in alcohol duty. They have already begun witnessing the negative consequences on their businesses, and they fear further consequences if another increase is implemented.
To address these concerns, the UKSA has written to MPs, encouraging them to visit distilleries or pubs in their constituencies this Autumn. Their aim is to allow MPs to witness firsthand the detrimental effects of the duty increase on both businesses and customers.
The issue of alcohol duty is of significant importance to the UK spirits industry, and stakeholders are hoping for a fair and balanced approach from the government. As the Autumn Statement approaches, all eyes are on the Chancellor to see if any changes will be made to alleviate the financial burden faced by the industry.
More detail via EXPRESS here… ( Image via EXPRESS )