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Gin breaks £2 billion mark – doubling in value in 5 years
General
| 19 September, 2018
A freeze to alcohol duty “represents a favourable outcome for the UK economy” according to a study for the Wine and Spirit Trade Association by independent financial experts.
Freezing the duty on wine and spirits is better for everyone – businesses and consumers but HMRC figures also show it brings in more cash to the public purse.
Despite this Philip Hammond is planning a 3.4% rise in line with inflation which would undermine an industry already facing a tough trading landscape following Brexit’s impact on the pound and rising inflation.
The Wine and Spirit Trade Association’s latest market report shows the summer of 2018 reached record highs for gin with sales, both home and abroad, peaking at £2.2 billion.
The records show that combined yearly sales of gin in the UK and British gin overseas have doubled in the last five years. In 2013 the total value of gin sales, UK and exports, reached just over £1 billion.
The latest figures taken from the WSTA’s yet to be published Market Report show that in the 12 months to June this year sales in the UK were worth over £1.6 billion, up 38% on last year.
Brits bought almost 60 million bottles in our shops, supermarkets, pubs and restaurants which means the equivalent of an extra 14.4 million bottles were sold in the UK, worth an extra £516 million, compared to last year.
Add to this the £532 million worth British gin exported in the last 12 months, according to HMRC, gin has broken the £2 billion mark as predicted by the WSTA last month.
Thanks to a surge in popularity of British gin, which has been dubbed the ‘ginaissance’, gin is out performing any other spirit in terms of growth of sales in the UK. The juniper-based spirit now accounts for a whopping 68% of value growth in the spirits sector.
But despite gin proving it is just the tonic for UK business, the nation’s favourite spirit is set to take a hit if the Chancellor goes ahead with planned rises to alcohol duty in the Autumn Budget.
Philip Hammond is planning a 3.4% duty rise in line with inflation which would undermine an ambitious industry looking to go global.
The rapid growth in UK distilleries and an increasing number of gin brands launched to market on top of the heatwave of 2018 has helped gin sales grow beyond expectations.
Miles Beale Chief Executive of the Wine and Spirit Trade Association said:
“Gin has proved itself to be just the tonic for the Government’s ambitions to grow exports of premium British products. On top of that the gin boom in the UK has allowed our talented and innovative British distillers to invest and grow their businesses creating new jobs and boosting the British economy. If gin continues to grow at this rate there’s no reason why the industry can’t set its sights higher, we could be talking about a £3 billion gin empire by the end of 2020.
“But as things stand, instead of supporting this jewel in the crown of the British drinks industry, the Chancellor is set to raise spirits duty at the next Budget. UK consumers already pay some of the highest alcohol prices in Europe. We are calling on Philip Hammond to freeze duty – just as he did last year. Yet again it would be a win/win/win – more money for the Treasury, support for British business, pubs and the cash strapped consumer.”
For every 70cl bottle of gin at 40% abv £8.05 goes straight to the Treasury. That’s 75% of an average price bottle of spirit is taken up by duty and VAT. Spirits paid £3.4 billion in duty in 2017/18, accounting for 30% of all alcohol duty income.
Following the freeze in spirits duty in the November 2017 budget, spirits duty income between February and June increased on the same period the previous year by £93m (+7%).
Last year an IWSR Forecast Report projected that gin is expected to grow by 37% by 2021.
Britain now boasts 315 distilleries in the UK – more than double the number that were operating across the country five years ago.
There are now well over 100 British gin brands on the market – it is hard to put an exact number on it as new gins come on the market so frequently. What we do know is that the number of gins now available in Britain has more than doubled since 2011.
