Wine to ‘go up by a pound’ as tax hikes spark inflation warning | Politics | News | EUROtoday

Bottles of wine and spirits might rIse by £1 subsequent month as trade leaders warn new alcohol obligation hikes will gasoline inflation and drive up prices for households already scuffling with larger costs.

The Wine and Spirit Trade Association (WSTA) has urged the Chancellor, Rachel Reeves, to scrap plans to extend alcohol obligation in subsequent month’s Budget.

An increase based mostly on the retail value index, estimated at 4.5 per cent, would add 14p to a bottle of Prosecco, 16p to crimson wine and 47p to gin.

WSTA chief govt Miles Beale described the hikes as “crippling” and warned one other enhance would “pour away Treasury funds” whereas pushing costs larger for shoppers.

He added: “Alcohol sales have been in steady decline since 2023, following the largest alcohol tax hike for 50 years. Instead of bringing in more cash to plug the black hole in public finances the Government is reducing tax take and fuelling inflation.”

The trade group stated current rises in National Insurance, minimal wage charges and a brand new “glass tax” had created a “perfect storm of crippling costs”. It warned that additional obligation hikes would push costs up by round £1 on bottles of wine and spirits in comparison with January this 12 months.

Mr Beale stated the Government’s coverage of repeated will increase was driving down gross sales and decreasing tax income. “The only way to break the cycle of tax duty increases penalising cash-strapped consumers, depleting Treasury funds and fuelling inflation is to freeze excise duty on wines and spirits at the November Budget,” he stated.

A ballot carried out for the group discovered that 72 per cent of drinkers imagine costs in outlets have soared within the final 12 months, with 74 per cent saying they’d additionally gone up in pubs. Of these noticing the rise, greater than a 3rd stated they had been shopping for much less alcohol in outlets and greater than half had been chopping again in pubs and bars.

Global wine firm Treasury Wine Estates, which owns manufacturers together with 19 Crimes and Penfolds, stated the sector couldn’t take extra will increase. Managing director Angus Lilley stated: “Across the UK, community pubs, restaurants and wine retailers are already feeling the strain from rising costs. Further tax increases will only deepen the pressure.

“Higher costs mean tougher choices for local pubs, higher prices on the menu, and less money flowing through the hospitality sector that keeps towns and cities vibrant.”

He urged ministers to “choose stability” by freezing alcohol obligation and supporting a plan that retains costs truthful and protects jobs.

Fortitude Spirits chief govt Ed Cottrell stated one other obligation rise could be “a disaster” for home producers. “Another duty hike on top of last year’s highest for 50 years, combined with EPR and higher employment and energy costs, is choking UK-based spirits manufacturing businesses,” he stated. “The result will be fewer companies operating and employing in the UK.”

Benjamin Elks, grassroots growth supervisor on the TaxPayers’ Alliance, stated: “Plans to increase alcohol taxes will be a hammer blow to establishments that are often at the centre of local communities.”

He added: “The hospitality industry has been crippled by recent tax hikes, driving up prices and leaving customers having to dig ever deeper just to afford a drink. The Chancellor should immediately rule out further tax rises on alcohol and give some relief to hard-pressed businesses and taxpayers looking to enjoy their favourite tipple.”

The Treasury was approached for remark.