Britain’s best loved wine and spirit SMEs have joined forces to
urge to cut wine and spirit duty and extend hospitality’s
VAT cut to alcoholic drinks to help boost British business.
Concerned owners of small and medium-sized wine and spirit
businesses have jointly penned a letter to the Chancellor asking
the government for more support for SMEs as businesses fight to
stay afloat in the grip of the Covid pandemic.
Much of the UK wine and spirit sector have seen their businesses
take a major hit as the hospitality sector were forced to close
their doors and shoppers deserted the high street.
The suppliers of the hospitality trade have not been eligible to
benefit from the loans and support packages offered by Government
to pubs, bars and restaurants.
That is why the WSTA and its members have decided to write an
open letter to the Chancellor asking for a vital lifeline in the
shape of a cut to alcohol duty on wines and spirits; and to
extend the VAT hospitality cut – until at least March 2022 -
broadening the scheme to include all sales of alcoholic drinks.
In the letter signed by 21 WSTA members typical of the sector’s
SMEs – which make up the majority of the UK’s wine and spirit
businesses – they highlight how their businesses face significant
pressures, especially if Government decides to raise taxes.
For many SME businesses, the on-trade represents the ‘shop
window’ for their products.
With repeated closures of venues, until at least March 2021, this
shop window has been shuttered and many small businesses are
suffering disproportionately. In the off-trade, too, prices are
set to rise for many wine retailers as the additional costs of
new trading arrangements with the EU begin to bite, which will
have to be passed on to consumers.
The WSTA’s letter warns the Chancellor that a rise to the UK’s
already significant tax burden is damaging enterprise.
Britain’s expert wine producers, spirit makers and specialist
wine and spirit retailers want to understand why the Government
insists on taxing what we do best most heavily.
Miles Beale, Chief Executive of the Wine and Spirit Trade
Association said:
“This Budget comes at a crucial time for British wine and spirit
SMEs who have had to baton down the hatches once again as the
country sits out a third lockdown without any confidence in
knowing when it might end.
The new and developing trading landscape since 1 January has also
put pressure on small and medium size businesses who are picking
up the tab for additional import costs and red tape.
SMEs have worked hard, despite drastic dips to their income, to
support communities through efforts like making hand sanitiser
and free local deliveries. Britain has some of the world’s
highest alcohol tax rates, and it is extremely unfair to pass on
more pain to cash strapped consumers and to SMEs fighting to keep
their businesses afloat.
We are asking for the Chancellor’s proactive support to help SMEs
- which are the backbone of a successful British industry – to
build back better.”
Tamara Roberts, CEO of Ridgeview Wine Estate,
said:
“We are a second-generation family business and through hard work
from our exceptionally talented and dedicated team we are now
recognised all over the world for our award winning English
sparkling wine. We would like to see more government support for
businesses like ours who want to continue to grow and fly the
flag for English wine on the global stage.
A duty cut at the Budget would give SMEs like ours some breathing
space in order to recover following the closure of the
hospitality sector. The UK’s duty rates are ridiculously high
compared to France. We’d like to see similar support from our
government through low duty to help nurture the ambitious UK wine
industry.”
Mark Gamble, Managing Director Union Distillers Ltd,
said:
“The hospitality business has been hit extremely hard by the
pandemic and some businesses will not recover. Every help is
needed to get those that survive to bounce back quickly. A
reduction in Duty will increase margins for the industry, helping
to recovering COVID losses and ensuring full employment of
staff.”
The UK is the world’s largest spirit exporter and a great British
success story. In 2019 Britain recorded over 440 distilleries, an
increase of 22% on 2018 and more than double the number of
distilleries recorded in 2014.
Britain has an ambitious and rapidly growing wine industry with
over 770 vineyards in the UK and 165 wineries. The UK’s wine
makers are keen to keep growing in terms of both domestic sales
and exports. Following the heatwave in 2018 the equivalent of
over 13 million bottles of wine were produced in the UK, double
the previous record harvest. The following year in 2019 around
550,000 bottles of English wine were exported to markets across
the globe.
Duty is currently so high that 55% of the average priced bottle
of wine and 73% of a bottle of spirits, at 40% abv, sold in shops
and supermarkets is now taken by the Treasury in tax and VAT.
The UK alcohol industry is one of the most heavily taxed in
Europe, as we are stung by the third highest duty rates for wine
and fourth highest duty rate for spirits when compared with EU
countries.
A cut would save UK wine and spirit businesses - which support
over 360,000 jobs - thousands of pounds, which can help
businesses to survive in the short term; and to invest, grow,
export and create even more jobs in the medium term.
