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| 19 October, 2021
The UK’s basket of Christmas booze is set to cost an all-time high this year with 43% of consumers’ cash going straight to the taxman
In Spain they will have more to celebrate this Xmas paying just 23% in duty and VAT
The Wine and Spirit Trade Association is calling on the Government to freeze alcohol duty as consumers face coughing up record high prices for a bit of festive cheer.
On his recent trip to Spain the PM would have enjoyed some of the world’s lowest taxed tipples. However, UK consumers are bracing themselves for further hikes on their favourite booze this Christmas, as the Chancellor is set to raise alcohol duty by RPI – which is currently at 4.8%.
Brits will be shocked by the reality of the tax on their shopping. For every bottle of average priced spirit (at 40% ABV) purchased a whopping 73%, £10.37, goes straight to the Treasury on duty plus VAT. For an average priced bottle of still wine 55%, £3.20, goes on duty and VAT.
In Spain shoppers pay 21% VAT on alcohol, but don’t have to pay any duty on wine, sparkling wine, champagne, sherry or cider. The Spanish do pay duty on spirits, but it it’s less than half the amount that British spirit drinkers are lumbered with.
The WSTA compared a typical festive season shop at a supermarket in the UK with the same or similar brands bought at a Spanish supermarket. The UK shop cost £233.58 compared to just £165 if you bought your festive drinks in Spain.
At almost £70 cheaper this Christmas shop comparison highlights how the UK’s excessively high duty rates, which are bumping up the prices for British consumers.
The online shop used in this comparison consists of 5 bottles of wine, 2 bottles of Champagne, 2 bottles of sparkling wine, 3 bottles of spirits, 2 bottles of port, 24 cans of beer and 6 bottles of 75cl ciders.
Almost half the cash paid for this typical festive booze shop in the UK will go to the taxman, with UK shoppers paying over 650% more duty than Spanish consumers.
The WSTA is calling on the Chancellor to freeze duty at the Budget next Wednesday, to avoid heaping even higher prices on British consumers as well as putting added pressure on the UK wine and spirit sector.
Rising costs as a result of the impact of Covid, closure of the hospitality sector, Brexit red tape, HGV driver and other staff shortages – has meant that businesses are facing record high prices, which are inevitably being passed on to increasingly squeezed consumers.
Miles Beale, chief executive of the Wine and Spirit Trade Association, said:
“Comparing the wine and spirit tax regime in the UK to that in Spain puts the UK’s excessively high rate of excise duty firmly in the spotlight.
UK consumers are already bracing themselves for shortages and price hikes this Christmas. The Chancellor can ease the financial pain for everyone who is hoping to make up for all the missed family gatherings and last year’s cancelled Christmas by not raising alcohol duty.
Freezing wine and spirit duty at the Budget will also give British businesses a much-needed break, which will be vital for our sector’s the road to recovery.”