Budget means UK wine drinkers will pay £1.3bn more

British Chancellor George Osborne’s decision to increase wine duty in line with inflation will see drinkers pay £1.3 billion extra over the next five years, according to analysis seen by db.

These wine drinkers won’t be smiling at the thought of having to contribute to £1.3 billion more in alcohol tax to buy their favourite wine (Photo: Wiki)

Total alcohol duties are now forecast to top £13 billion by 2020/21 – despite the fact that British people are drinking less year-on-year – due to the tax changes.

That’s £1.3 billion higher than current total tax collected from alcohol sales in the UK –  with wine drinkers the overwhelming contributors to this growth.

Total duties collected on wine are expected to increase by 32% between 2014/15 and 2020/21.

It continues a trend that began in 2012, when wine drinkers became the biggest spenders on drinks tax, overtaking beer drinkers for the first time.

The table shows the chances to drinks taxes over the last five years (Photo: WDR)

The Wilson Drinks Report Budge Analysis estimates that the duty hike of 1.7% in line with inflation will add an extra 5p on to the price of every bottle of wine sold from shops and supermarkets, if retailers choose pass on the cost.

The Chancellor’s move to leave wine out of his beer and spirit tax freeze will also negatively affect the UK’s burgeoning home-grown wine industry, according to experts.

Tim Wilson, managing director of WDR, said: “Even though the English wine industry is growing strongly, wine is primarily an import business unlike beer, cider and spirits which are mostly produced in this country.”

Meanwhile, spirits taxes will overtake beer taxes within the same time period, according to official forecasts.