Alcoholic Drinks: Industry

(asked on 2nd February 2017) - View Source

Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what recent assessment his Department has made of the value of the UK wine and spirits industry to the economy.


Answered by
 Portrait
Jane Ellison
This question was answered on 7th February 2017

The Government has made no independent assessment of the contribution of wine and spirits to the UK economy. However, HM Treasury engages with a wide variety of organisations, including the Wine and Spirits Trade Association, to understand developments in the wine and spirits markets.

Current and historic duty rates for wine and spirits can be found in HM Revenue and Customs’ (HMRC’s) published Alcohol Bulletin. This is available to view at: https://www.uktradeinfo.com/Statistics/Pages/TaxAndDutybulletins.aspx.

The Government keeps all taxes, including wine and spirits duties, under review. Evidence from stakeholders on the impact of potential changes will be considered as part of the Budget process. An indication of the fiscal effect of a one per cent increase in duty in 2017-18 on all alcoholic drinks is set out in the HMRC publication, Direct effects of illustrative tax changes. This is available to view at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/571367/Nov16_Direct_effects_illustrative_tax_changes_bulletin_final.pdf. For small changes in duty, the one per cent ‘ready reckoner’ can be scaled up or down to derive a rough estimate of larger changes.

The legal incidence of the duty is on producers, but increased duties are passed through as higher retail prices. Higher duties are thus estimated to reduce alcohol consumption.

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