The Chancellor's decision to continue the automatic tax escalator on drinks has been denounced as a 'lazy cash grab' and satirised as 'our own Olympic record' by drinks professionals.
In today’s Budget announcement, the Chancellor of the Exchequer, George Osborne, said the alcohol tax escalator which automatically increases tax on alcohol by 2% above inflation, will stay.
This will see duty on alcohol rise by 5%, meaning that tax on a bottle of wine represents around 56% of the cost of the bottle.
From 26 March, consumers will now pay £0.11 more on a 75cl bottle of wine, £0.41 more on a 70cl bottle of spirits at 37.5% abv and £0.03 more on a pint of beer.
This is unacceptable, UK Wine and Spirit Trade Association interim chief executive Gavin Partington said.
‘The rate of alcohol taxation in the UK is now so out of step with our European neighbours that visitors to the London Olympics will face paying 50% more for an average bottle of wine (£4.89) than if the Games were being held in Paris (£3.26) and triple what they would pay in Madrid (£1.52).’
The tax burden on the drinks sector would hold it back from contributing to any economic recovery, Partington said,
‘Today’s Budget puts Britain on course for an Olympic record that gives no cause for celebration.’
Oddbins managing director Ayo Akintola said, ‘This is simply a continuation of a lazy cash grab on consumers who are hammered for enjoying a glass of wine.’
He went on to criticise the government for adding a disproportionate burden of tax on wine merchants who are ‘trying to compete with supermarkets that continue to use alcoholic beverages as a loss leader.’
Moreover, he said, ‘The drink industry is being singled out in a manner that will do nothing to reduce binge drinking.’
In March 2008 the Chancellor announced a 4 year tax escalator, to increase duty rates by 2% above the rate of inflation. In March 2010, it was announced that the escalator would remain in place for two further years, until 2014-15.
Written by Adam Lechmere
