Over 75,000 jobs will be at risk if the Government proceeds with its current plan to increase taxes on alcohol over the next four years, the UK drinks industry has warned.
In March 2008 the Chancellor announced a 9% increase in alcohol duty and his intention to introduce a four year tax escalator, increasing duty rates by 2% above the rate of inflation from April 2009.
November 2008 saw a further 8% increase in alcohol duty, designed to offset a temporary reduction in VAT, resulting in a total duty increase of 17% in 2008.
The drinks industry is urging the Government to abandon the 2% over inflation tax escalator on alcohol and pledge no further increases in excise duty in this year’s Budget.
A spokesman for the five major drinks trade associations said: ‘We urge the government to reconsider before it is too late. Our industry is being hit as hard as any other UK manufacturing or retail sector.’
‘We are not asking for a handout. We only ask the Chancellor to abandon further tax increases which will force more job losses.’
Last year’s 17% leap in excise duty coupled with the four year tax escalator could lead to a 17% rise in consumer prices and an 11% slump in alcohol sales, research by Oxford Economics has warned.
Decanter editor Guy Woodward will be at the House of Commons tomorrow as advisor to the All Party Parliamentary Wine and Spirits Group in an enquiry into the impact of tax changes on the UK wine industry ahead of this year’s Budget, announced on April 22.
Woodward will act as an intermediary between the group of MPs and industry representatives giving evidence, who include Tim How, ex chief executive of Majestic, Simon Berry, chairman of Berry Bros & Rudd and Troy Christensen, chief executive of Constellation Europe.
Written by Lucy Shaw