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UK Chancellor Announces Alcohol-Duty Rates To Rise In Line With Inflation

By Steve Wynne-Jones
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UK Chancellor Announces Alcohol-Duty Rates To Rise In Line With Inflation

The UK Chancellor of the Exchequer, Philip Hammond, has said that the duties on alcoholic products such as beer, cider, wine and spirits will increase in line with inflation, in the country's Budget announcement.

There were fears among industry professionals that a hike in beer, wine and spirit duty was on the cards, as the UK government tries to plug a deficit. The duty changes will apply from 13 March, next week.

As a result of the 3.9% inflationary rises on alcohol imposed by the Chancellor, a bottle of wine will go up by 8p, sparkling wine by 10p, and an average-priced bottle of spirits will rise by 30p.

Some in the industry, such as the Wine & Spirit Trade Association, said that the Chancellor should have reduced alcohol excise in order to make the sector more competitive.

“It is disappointing that the Chancellor has failed to support a great British industry," said Miles Beale, the group's chief executive. "He has increased what were already excessive and unfairly high rates of duty for the UK’s wine and spirit consumers and businesses.

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"Between Brexit’s impact on the pound and rising inflation, the wine and spirit businesses face a tough trading landscape. This is a missed opportunity to back British business and help out struggling consumers.

"The added uncertainty of another Budget in six months’ time is unwelcome and will further undermine business – and consumer – confidence.”

The British Retail Consortium, meanwhile, largely welcomed the measures implemented in the Budget, which saw the Chancellor reduce corporation tax to 19%, with a further fall scheduled for 2020, when it will drop to 17%.

"We agree with the Chancellor that the world around us is changing quickly, and we need to have a business-tax system that is fit for purpose in the twenty-first century," said Helen Dickinson OBE, chief executive of the BRC. "Any review needs to incorporate business tax in its entirety, and not be constrained by the technicality of fiscal neutrality around business rates.

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"We hope that the relief measures will help some of those businesses hardest hit by the revaluation, albeit only temporarily. However, more short-term relief measures continue to add complexity to an already impenetrable system. [Some] £435 million is a drop in the ocean, compared with the £25 billion a year that the tax raises.

"This is yet another sticking plaster on a chronically ill patient – an unsustainable property tax higher here than anywhere in the developed world."

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

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