The Palace of Westminster
Tomorrow is budget day in the UK. Like the Grand National, the Baftas or the last night of the Proms, it’s something of a national ritual. The chancellor will be photographed outside Number 11 Downing Street with the red budget box, Dennis Skinner, the MP for Bolsover, will make a witty aside and alcohol duty will rise again.
The last of these three things is not a complete certainty, but the odds against it are very high. The four year “tax escalator”, which increases duty by 2% above inflation, was introduced in 2008 and reconfirmed by the Treasury in March 2010. Unless the Chancellor makes a tyre-scorching u-turn, UK wine drinkers are stuck with these increases until 2014 at the earliest.
The Wine and Spirit Trade Association is predicting an increase of 7.2%, even though duty and VAT already account for half the price of a bottle of wine. We already tax wine more heavily than most of the EU, right up there with Ireland and Sweden. And it’s about to get even worse, folks.
The government’s hypocritical argument is that this is a way or combatting alcohol abuse, when it’s primarily about revenue. There are 9 EU countries that have 0% alcohol duty and there doesn’t seem to be a correlation between low or no taxes and binge drinking or alcoholism. When did you last see a display of vomit-spattered public drunkenness in Madrid, Rome, Berlin or Paris? These countries just drink more responsibly than we do.
If wine is to be taxed more heavily, retailers have to pass on the rise this year rather than screwing their suppliers to fund it. If the supermarkets insist on keeping most of the wines on their shelves below £5 (the UK’s average price point is a measly £4.85), then the quality of what we consume will only get worse. It’s not an appetising prospect.