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WSTA: scrap duty escalator to give drinks firms an Olympic boost

Published:  13 February, 2012

The WSTA is calling for the Treasury to halt the duty escalator in order to give drinks buinesses an Olympic boost.

The escalator threatens to deliver a 7.2% increase in March, despite the combined effect of  duty and VAT already accounting for three quarters of the average price of a bottle of vodka and half the price of a bottle of wine.

The rate of alcohol taxation in the UK is so far ahead of the rest of Europe  that visitors to the London Olympics will face paying 50% more for an average bottle of wine than if the Games were in Paris and triple what they would pay in Madrid.

Pressure on the drinks industry is mounting, with the volume of UK alcohol sales falling by 3% in 2011. In pubs and restaurants, sales of wine dropped by 7% last year and spirits by 3%.

WSTA interim chief executive Gavin Partington said: "We recognise the pressure there is on the public finances. However easing the duty burden on the drinks industry would boost growth and investment, helping the sector to play its part in the UK's economic recovery.

"By scrapping the planned duty increase, the Chancellor would also be providing some much needed relief to consumers whose household budgets are already being squeezed.

"With thousands of extra visitors heading to the UK for the Olympic Games, this is no time to force drinks prices up even further."