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Wines, spirits tax hike to wipe out benefits for pubs, bars: WSTA

DBR Staff Writer Published 24 April 2013

The increase in wines and spirits tax is set to wipe out the benefits of pubs and bars from the beer tax cut and affect women, who prefer wines and spirits over beer, according to a new analysis by UK-based organization for the wine and spirit industry - Wine & Spirit Trade Association (WSTA).

Since the introduction of alcohol duty escalator in 2008, wine duty has increased by 50% and that of spirits by 44%. The latest 5.3% tax increase has resulted in increase of 10p on a 750ml bottle of wine and 53p on a 1l bottle of spirit.

The latest alcohol duty rise in the on-trade is expected to force clubs, pubs and bars to pay extra tax of £34m in 2013-14, compared to tax paid in 2012-13.

Since 63% of women prefer wine, as against 33% men, the tax rise would force women to pay £65m more than men. Women will also have to pay extra for spirits as 22% of women drink spirits compared to 13% men.

WSTA chief executive Miles Beale said the tax rise of over 5% on wines and spirits will wipe out the beer tax cut benefits and add another £34m to the tax bill for the on trade.

"We are concerned that women look set to be penalised by wine and spirit price increases across the board, simply because they make different choices about what to drink," Beale added.

"With wine and spirits now accounting for 41% of the value of products sold in the on-trade, the only way the Chancellor can genuinely help pubs is to scrap the hated duty escalator for wine and spirits too."