Tax accounts for more than half of the total cost of the average family’s Christmas alcohol shop, a study by the wine and spirits industry has found. While alcohol duties are typically higher per head in Finland, Ireland and Germany, British consumers pay more alcohol tax than the citizens of most other European Union member states.
In the UK, a family spending £171.66 stocking the drinks cabinet for the festive season will hand over £88.19 of that sum to the Treasury. By comparison, the total cost of the equivalent amount of alcohol in France would be £136.89, with just £43.52 going to the taxman.
According to the Wine and Spirit Trade Association (WSTA), which commissioned the research, 50% of the total cost of alcohol in the UK is accounted for by Treasury-imposed duties, while in France the levy represents on average just 32% of the cost.
“Comparing the wine and spirit tax regime in the UK to that in France puts the UK’s high rate of excise duty firmly in the spotlight,” said WSTA’s chief executive, Miles Beale.
The numbers were produced by comparing a festive-season shop consisting of five bottles of wine, two bottles of champagne, two bottles of other sparkling wine, three bottles of spirits, two bottles of port, 24 cans of beer and 12 ciders.
WSTA is warning that the price of wines and spirits will rise in the new year, when manufacturers and importers begin to pass on the extra costs triggered by the fall in sterling’s value that followed the decision to leave the European Union.
“In addition, with inflation levels rising to 1.2% in November, spirits prices will increase and wine will be hit again,” said Beale. “And that is also why it’s vital there is no increase to duty on wine and spirits at the next budget in March. The chancellor can provide welcome relief for businesses that have some extremely testing times ahead.”