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London's Gin Boom Facing Further Tax Hikes

Published on Nov 10 2017 11:40 AM in Drinks tagged: Gin / London / WSTA / Philip Hammond

London's Gin Boom Facing Further Tax Hikes

London is experiencing a gin boom, with the UK capital boasting 24 gin distilleries, which make up one-fifth of the total number in England, according to the Wine and Spirit Trade Association (WSTA)

However, the UK Chancellor Philip Hammond increased spirit duty last March by 3.9%, which added 30p to an average priced bottle. Hammond is now planning another increase of 3.4%, adding an extra 26p.

The duty increases could rake in £2 billion from British gin over the next five years.

According to a recent survey by the WSTA, 28% of adults in London said they drink gin, higher than any other region in the UK.

The city has seen over 20 specialist gin themed bars open in the last few years, serving a wide variety of the 'quintessentially British' drink. Sales increased by 12% in 2016 - the fastest growth rate of any spirit.

Joining Forces

London’s gin makers have called on the Chancellor to put the duty on hold, and instead support creative start-ups who have helped drive this gin renaissance.

Four London distillers have teamed up with the WSTA, and 17 other distilleries nationwide, to write to the Chancellor calling for him to scrap continued duty rises.

Businesses are warning that the increase will stifle the growth of start-ups who have helped drive the gin resurgence and led to British gin breaking records at home and abroad.

“The recent surge in numbers of gin distilleries and bars opening in London is a real bonus for the capital, bringing a welcome lift to the economy, tourism and also creates jobs,” said Miles Beale, chief executive of the WSTA.

More people are enjoying a gin at home than ever before, with gins sales in supermarkets and shops breaking the £500 million barrier for the first time, up £200 million since 2012, according to the most recent sales figures of the WSTA.

This equates to 36.3 million bottles sold in the last 12 months, up nearly half a million bottles on last year, it added.

Meanwhile, 8.3 million bottles were sold in UK pubs, bars and restaurants, worth £687 million in the same 12 months.

Disgruntled Distillers

One example is Hayman’s Distilleries, which began producing gin out of London over 150 years ago. It has since moved its operations to Balham, less than 7km away from where its first gin distillery was located.

“At a time of great uncertainty for the UK regarding our future International trading relationships, it is imperative that the government supports products made in England," said James Hayman, Co-owner of Hayman Distilleries.

"The resurgence of gin has had such a positive impact on our economy and the government needs to ensure this can continue by not increasing duty further.”

Alex Wolpert, founder of the East London Liquor Company, also supports the freeze, saying that the duty hikes are opportunistic given the sales increases during the coming Christmas season.

“Duty already accounts for approximately 40% of our bottle price," he said. "With the current economic landscape, including the cost of living increasing and wages at an all-time low, the consumer ends up being the one to foot the chancellor’s duty increase, perpetuating the problem of the public’s expendable income being further reduced.”

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Kevin Duggan. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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