SPIRITS & WINES: Excise duty stamps dampen UK spirits

UK. In his Budget today the Chancellor of the Exchequer announced the go-ahead for a range of anti-spirits fraud measures including tax stamps on liquor products above 22%ABV, with a scheme of duty deferment. The effects will be far-reaching, affecting importers of overseas spirits, warehousekeepers and domestic producers.

The additional costs will be a major disincentive for some smaller specialist brands in the UK market. For the larger drinks groups it is a case of installing labelling machines not only in the UK but in other countries for product destined for the UK market.

For export shops and Registered Mobile Operators (travel retail) the effects on the operation of dual duty paid and duty free shops are not yet clear. A number of new offences and penalties will be introduced for dealing in unstamped products. More details are awaited over the coming days.

UK Travel Retail Forum secretary general Barry Goddard commented: “The Chancellor’s decision was not entirely unexpected, but it is nevertheless disappointing as it will add significant costs for the spirits industry, without providing a truly effective solution to the problem.

“Nevertheless this is what the government has decided and we must now do everything we can to ensure that travel retail outlets are exempt from the scheme.”

A statement from the Scotch Whisky Association said: “The government must now honour its promise that it will minimise the costs to the industry, to ensure tax stamps are introduced in consultation with the industry, in the least damaging way possible.”

Also in the Budget, UK excise duty on spirits was frozen for the seventh year running, slightly narrowing the duty ‘gap’ with other European countries such as France.

See our earlier story here for more background on the likely knock-on effects of the measure.

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