Increasing alcohol tax will threaten jobs, WSTA warns

04 February, 2008

The Wine & Spirit Trade Association has delivered a stark warning to the Treasury over plans to put higher duty on alcohol in this year's Budget.

In its budget submission to the Treasury, the WSTA said a potential tax increase on wine and spirits would threaten 50,000 jobs in the drinks industry and reduce revenue for the Treasury, because "average" drinkers would buy less.

WSTA chief executive Jeremy Beadles urged Chancellor Alistair Darling not to bow to pressure from anti-alcohol lobbyists who believe a tax increase on alcohol would solve problem drinking.

He said: "Raising the price of alcohol by raising taxes will unfairly punish the majority of responsible drinkers for the misdeeds of a small minority.

"Our research shows that any such increases will do little to address problem-drinking while hurting the economy and the Treasury. It simply does not make any sense."

An economic analysis carried out by the WSTA showed that if taxes were to rise 10 per cent on both wine and spirits, consumption among sensible drinkers would decrease, leading to a potential loss of 102 million in duty for wine and 92 million for spirits.

Overall, the impact on the economy would be a loss of 1.57bn for wine and 1.26bn for spirits under a 10 per cent duty hike, causing inevitable job losses in the drinks industry.

The Budget will be announced on March 12.

Click the link below for more industry comment on this year's budget.

Gloomy duty hike looms in Budget.

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