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Duty escalator negatively impacts UK wine, spirits sales: WSTA

DBR Staff Writer Published 20 June 2013

Alcohol volume sales continue to decline in both off-trade and on-trade in the UK, largely due to the duty escalator, according to the latest quarterly report by Wine & Spirit Trade Association (WSTA), the voice of the UK wine and spirits industry.

Volume sales have fallen by 3% in the off-trade and 3% in the on-trade for the year, and 3% and 2% in the last 12 weeks, respectively.

Volume sales of wine in both off- and on-trade were down by 1% in short term, while volume sales of spirits were down by 2% in off-trade and remained flat in on-trade.

The fall in alcohol volume sales was primarily due to duty escalator, which increased duty on wines and spirits by another 5.3% in this year's budget.

Among different wines, sparkling wine reported strong volume growth in both on- and off-trade markets, followed by Champagne, which reported growth in on-trade.

Among different spirits, rum posted growth in off-trade, while malt whiskey, liqueur and brandy reported growth in on-trade markets.

WSTA CEO Miles Beale said while there are a small number of categories in the wine and spirit sector with modest volume growth, the overwhelming picture is one of decreased sales and increased duty rates, with consumers inevitably having to foot the bill.

"Since the introduction of the alcohol duty escalator in 2008, duty on wine has increased by 50% and spirits by 44%, putting the sector under significant pressure," Beale added.