Overseas visitors from parts of Europe to the Olympic Games in London this August will be paying 50% more for a bottle of wine than they would do so in their own countries, according to the Wine and Spirit Trade Association (WSTA).
The WSTA is calling on the Treasury to “spare hard-pressed businesses and consumers” from another alcohol duty rise in this year’s Budget.
The alcohol tax escalator threatens to deliver a 7.2% increase in March, even though duty and VAT already account for three-quarters of the average price of a bottle of vodka and half the price of a bottle of wine.
The WSTA said the rate of alcohol taxation in the UK was now so out of step with European neighbours that visitors to the London Olympics will face paying 50% more for an average bottle of wine than if the games were being held in Paris and triple what they would pay in Madrid.
Pressure on the drinks industry is mounting, said the WSTA, 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%. Shops also reported a drop in sales of wine and spirits.
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.”