BENJAMIN Franklin’s famous quote about death and taxes being the only certainties in life definitely holds true in the UK drinks trade, writes Bibendum Wine MD Michael Saunders.
Come the Budget on March 20 we can all be sure that duty on wine will increase again.
Since 2008, duty has increased by 2% above the rate of inflation at every Budget, resulting in the cumulative duty on wine increasing by 36% and that on spirits by 31%.
This year’s Budget will probably see duty on wine rise above £2 per bottle. Once 20% VAT is added on top of that it means over 55% of the average bottle of wine sold in the UK goes straight to the government.
For too long, our industry has accepted our role as a de facto extension of HRMC without doing enough to challenge this policy.
A quick look at the facts shows that ours is a dynamic, responsible industry that more than pays its way and which contributes positively to society.
Despite this positive contribution, duty continues to rise, ostensibly to help alleviate the damage alcohol inflicts on society. The truth is, it continues to rise because there is a very large budget deficit to address and alcohol taxation is one of the Treasury’s most reliable cash cows.
Ever higher taxes and regulation are very blunt instruments when it comes to addressing the issues that surround alcohol.
The way forward is to invest in education. The ideal scenario for all parties is to help drinkers understand that the future lies in consuming less but better. Less because this will negate the negative impact alcohol abuse has on individuals and wider society; better because that is where excellence (and more profit) lies.
No one else is going to do this for us. We need to make our case loudly and clearly to protect our industry and our future growth.
Image – Bibendum Wine MD Michael Saunders.