Ahead of Alistair Darling's first Budget on 12 March,
when he is widely predicted to hike taxes on wine and spirits amid
concerns about binge drinking, the WSTA warned in its submission to the
Treasury that increases would have potentially catastrophic consequences for
the industry.
A 10 per cent increase in taxes on alcohol
would see more than 50,000 jobs lost in the industry and the economy losing out
to the tune of £2.8bn, the Wine and Spirit Trade Association (WSTA) has warned.
"Not only would increases in tax punish the majority
of responsible drinkers, but such increases would do little to reduce problem
drinking while reducing revenue for the Treasury," said Jeremy Beadles,
chief executive of the WSTA.
The study commissioned by the trade body argues that a 10 per cent rise
in tax would only lead to a 1.9 per cent reduction in the consumption of wine
and a 4.8 per cent cut in the consumption of spirits.
"Increasing the excise duties on wine and spirits could run the
risk of a quintuple whammy – leaving heavy drinking unaffected, reducing the
enjoyment of innocent drinkers, encouraging illegality
through smuggling, losing tax revenue and reducing GDP," says the study.
The WSTA recently warned that British drinkers already face the prospect
of having to pay around 10 per cent more for their favourite tipples this year
because of poor grape harvests and the increasing cost of raw ingredients.
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