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Autumn Statement: Concerns about alcohol duty plans

There has been uncertainty around the UK's alcohol duty plans following chancellor Jeremy Hunt's Autumn Statement, after wine and spirits trade leaders warned that allowing tax to rise would lead to higher drinks prices.

UK chancellor Jeremy Hunt used his Autumn Statement to outline a number of economic measures, but wine trade leaders were still seeking clarity on the government’s position on alcohol duty immediately following the speech.

The government’s Autumn Statement document only appeared to refer to projected benefits of last month’s decision to reverse a planned freeze on alcohol duty, as well as benefits of duty reform plans.

‘There is nothing to welcome or comment on following today’s Autumn Statement,’ said Miles Beale, CEO of the Wine & Spirit Trade Association (WSTA).

‘We have no further information other than that the Chancellor has not yet decided by how much, or when, alcohol duty will be increased.’

He added, ‘We will continue to ask to meet with Treasury ministers as a matter of urgency. We want to see support for businesses in our sector, including as small and as few increases to duty as possible in 2023. And to ensure that changes to the UK alcohol taxation system are fairer, simpler and are delivered with less red tape.’

A WSTA spokesperson added that nothing was being ruled out or in at this stage.

Last month saw the government reverse a planned duty freeze on alcohol, which had only been unveiled in September during Kwasi Kwarteng’s brief tenure as chancellor.

Ahead of the chancellor’s Autumn Budget announcement this week, Beale said, ‘The mood across the UK alcohol industry is bleak following the Treasury’s U-turn on a duty freeze.’

With costs also rising, ‘cash-strapped consumers will be picking up the bill with prices of their favourite drinks set to soar next year’, he said.

More than 100 wine and spirits industry leaders wrote an open letter to the chancellor earlier this week, warning that a failure to reinstate a duty freeze on alcohol would lead to further prices rises on drinks.

Beale was one of 116 signatories from across the trade, including wine merchants, to the open letter to The Times newspaper calling on the Chancellor to bring back the freeze.

The letter said, ‘Sir, the government’s decision to reverse the alcohol duty freeze will result in a double-digit tax rise that unnecessarily fuels inflation, leads to higher prices for consumers and to thousands of jobs being put at risk.’

Restaurants get ‘welcome relief’ amid cost pressures

There was some better initial news in the Autumn Statement for restaurants and bars.

Kate Nicholls, CEO of trade group UK Hospitality, welcomed the Treasury’s announcement of a £13.6bn package designed to support firms with business rates.

Nicholls said on Twitter that the details of the five-year support package were yet to become clear, although the announcement was a ‘welcome relief’ for hospitality and retail businesses.

UK Hospitality has warned about the many pressures facing its members, including from energy costs, inflation, staffing challenges and the prospect of rising business rates.

Earlier this week, Nicholls had warned that some businesses faced collapse if business rates were allowed to rise with no extra support from government. ‘Hospitality has been hit harder than any other sector by inflation, with many already struggling to pay their bills,’ she said.


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