Wine sales have gone down over the last six months. Credit: The Wine and Spirit Trade Association.

The Wine and Spirit Trade Association (WSTA) has urged the UK chancellor to cut wine and spirit duty by 2% in the upcoming budget and sent its budget submission to the Treasury.

WSTA noted that a duty freeze in the 2017 budget, resulted in a bumper tax windfall for the Treasury and the decision was beneficial for consumers as well as businesses in the UK.

However, this respite given by the government was short-lived. The Chancellor once again froze spirit duty but left wine out with unfair duty increase in 2018.

WSTA chief executive officer Miles Beale said: “Duty rises are bad for consumers, bad for business and bad for the Exchequer, as the Government’s own figures clearly show. After the wine was singled out for a duty rise wine revenues have fallen on the previous year, in line with a slump in wine sales.

“We recognise the fact that alcohol duty is an important revenue stream for the Government to fund public services, which is precisely why we are calling for a 2% duty cut on wine and spirits.

“A cut will not only boost Treasury coffers but also bring a boost post-Brexit to British businesses and consumers, whereas another rise will have a negative impact on all three.”

Under the figures released in the government’s recent Alcohol Duty Bulletin, the wine sales went down over the last six months due to a tax that was levied on the wine products, leading to a 2.1% drop in revenue to the Exchequer, down to £2.4bn from over £2.5bn mark.

WSTA states that if the same rate of decline continues, then the Treasury could stand to lose £93m in 2019 compared to 2018.

It added that the beer and spirits, which received a duty freeze in the last budget, has seen a positive revenue income, with beer up 2.4% and sprits up 1.7%.

Beale added: “If Government chooses to increase what are already some of the world’s highest alcohol tax rates, it will not only push up prices for people who voted them in but also hit hard an industry that prides itself in flying the flag for brand Britain.

“We agree it’s time for the government to change the UK’s unfair, outdated and restrictive wine and spirit duty regime. However, the Chancellor should pre-empt reform with a duty cut.”