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On-trade alcohol sales continue to fall due rising prices

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On-trade alcohol sales continue to fall due rising prices

Sales of alcohol by volume in the on- and off-trade have continued to drop for the fourth quarter in a row due to ongoing price rises. 

The Wine and Spirit Trade Association (WSTA) reported today that Brexit’s impact on the pound, rising inflation and the 3.9% inflationary duty rise on alcohol imposed by the Chancellor during the Budget in March are all factors to the price increase.

Sales of wine in pubs, bars and restaurants show the average price of a 175ml glass of wine has increased 21p compared the same period last year.

During the Budget, the Chancellor confirmed there would be no change made to alcohol taxation policy – meaning alcohol duty will increase year on year in line with inflation.

If this continues through the autumn Budget, then wine duty will go up by another 8p a bottle, spirits 29p and beer will increase 2p a pint.

This year, the average retail price of a bottle of wine hit an all-time high at £5.56. It currently sits at £5.58 – 4% higher than the same period last year.

Over half (56%) of the cost of the average bottle of wine is taken up in tax, including £2.16 tax and 92p VAT. Duty rates are even higher on products like English sparkling wine at £2.77 a bottle.

Miles Beale, chief executive of the Wine and Spirit Trade Association said: “The inflationary duty rise on alcohol – at a painful 3.9% – inflicted in the March Budget came on top of the effects of Brexit: the fall in the value of the pound, compounded by rising inflation. The latest WSTA Market Report shows that consumers are well and truly feeling the effects of the triple whammy.

“But I am sad to say the pain doesn’t end here. The autumn Budget is set to see alcohol duty rise by inflation once again. Unless Government starts showing support for our under-valued alcohol industry, in November we’ll find ourselves on the end of a further blow to follow up the triple whammy combination already dealt out to our industry this year. We need a time out from excise duty increases.

“The YouGov poll published in the WSTA Market Report reveals consumers’ unease at creeping costs, with 80% of people polled expressed their concern over the prospect of paying higher prices, up from 71% in February. It is time for the Chancellor to act positively by addressing the wine and spirit industry’s historically high and deeply unpopular duty levels.”

The figures reported in the WSTA Market Report take into account sales between 26 March and 17 June 2017.

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