Increase in alcohol taxes threaten price rises

Highlighted in its budget submission to the Treasury, the WSTA warned that not only would rises in tax punish the majority of responsible drinkers, but it would actually reduce revenue for the Treasury and threaten over 50,000 jobs. Jeremy Beadles, chief executive of the WSTA, commented: "Raising the piece of alcohol by raising taxes will unfairly punish the majority of responsible drinkers for the misdeeds of a small minority. Our research shows that any such increases will do little to address problem-drinking while hurting the economy and the Treasury." The report estimates that prices per bottle will soar by up to 10% - up from £14.99 to £16.49 – almost five times the official rate of inflation. Under this 10% rise for both wines and spirits, the combined revenue loss from duty and VAT would be £102 million for wine and £92 million for spirits. The negative impact on the economy would be £1,572 million for wine, and £1,262 million for spirits. These increases would also cause a loss of employment of 28,000 for the wine industry, and 23,000 for the spirits industry. This would have an inflationary impact during a time of increasing concern about inflation. Results also suggest that the increase in taxes would lead to just a 1.9% reduction in the consumption of wine, and a 4.8% reduction in the consumption of spirits. A survey, conducted by the WSTA in December, showed that just 5% out of the 1,011 respondents, thought taxes on alcohol are too low. And one third said they would go abroad more often to buy drink if taxes on wine and spirits were increased significantly. Weblink: www.wsta.co.uk