The Great Duty Debate Part 2 - or 'How much difference is that 2% cut really going to make?'
So, the big news this month is that the Chancellor has cut Duty on spirits by a whopping 2%. Well whoop de doo. Don’t get me wrong, this is definitely a step in the right direction but how much difference is it really going to make?
Assuming that this Duty cut actually gets passed on to the end consumer (which I very much doubt), that equates to a saving of a grand total of 20 pence, including VAT, on every bottle of spirits you buy. For sake of argument, let’s say you buy a bottle of whisky a week. In just over a year, 58 weeks to be precise, you’ll have saved enough money to buy yourself a bottle of Tesco Value blended whisky. Won’t that be a treat?
Seriously though, if saving 20p on a bottle of spirits really makes a difference to your life then you really shouldn't be buying it in the first place!
It wasn't just spirit duty that was cut either, beer duty was also cut by a penny a pint. So if you buy 300 pints, you effectively get one free. I don’t really know how much a pint costs these days, it may not be £3, but you get the idea.
But maybe I’m looking at this the wrong way. Maybe it’s more about the wider political and economic implications rather than how it affects the end consumer - a tacit agreement by the government that alcohol duty is, in fact, too high? Or a cynical plot to win over voters with a crowd pleasing tax cut in a General Election year? I know which one I’m going for! The SWA is certainly hailing it as a historic move though and a ‘significant boost to a home-grown industry’. When you consider that there have only ever been five spirits duty cuts since the landmark 1823 Excise Act then this duty cut, small as it is, certainly does seem to take on a bit more importance.
It’s when you look at alcohol duty overall though, and not just spirits duty, that you realise just how highly taxed spirits are compared to other alcoholic drinks. I hadn't realised quite how much of a difference there was until I looked it up on the HMRC website. And it’s not just the levels of duty that are different either, it’s also the way the duty is calculated. For example; spirits and beer are taxed according to alcohol strength (litres of pure alcohol) whereas cider and wine are both taxed by volume of product (albeit with lower or higher duty rates for very low or very high alcohol examples of these). The end result is wildly different duty receipts depending on what you are buying. I’ve done another infographic (starting to like these things) to show just how much disparity there is!
For those of you that like concrete figures, the Duty per litre on the examples I have used is;
Spirits at 40%vol £11.06
Beer at 4% vol £0.73
Cider at 5% vol £0.39
Wine at 14% vol £2.73
For the purposes of comparison, if everything was taxed the same as spirits, the figures would be;
Spirits at 40%vol £11.06
Beer at 4% vol £1.10
Cider at 5% vol £1.38
Wine at 14% vol £3.87
Bit of a difference, isn't it? I think it’s time for a radical overhaul of the duty system. I tend to agree with the SWA that the fairest way of doing things is to have one duty rate based on the litres of pure alcohol in the product. After all, alcohol is alcohol, right? Especially in these days of responsible drinking and recommended units. Why should one unit of alcohol consumed as whisky be treated any differently from one of beer or cider or wine? You could always have reduced duty rates for small scale producers (as they already do for beer) to help small or new producers, who don’t have the same economies of scale for their raw materials or production costs, compete on a more level playing field than the big boys. Surely this would do more to stimulate the economy and support home grown industry than a token 2% duty cut, welcome as it is?
According to my advent calendar (yes, I still get one, my Mum buys me one every year!) there are 12 days to go til Christmas, which made me think of the song 12 Days of Christmas. You know the one, ‘On the first day of Christmas my true love sent to me, a partridge in a pear tree, etc etc’.
I also recently read a very funny wee book by John Julius Norwich about the 12 Days of Christmas giving an amusing insight into what the recipient really thinks of the 12 imaginative gifts her true love sends her, accompanied by illustrations by Quentin Blake. I’ve always liked Quentin Blake, ever since reading all the Roald Dahl books as a kid.
Anyway, back to drinks which is the whole point of this post - I thought it would be fun to do a wee Christmas countdown, finding drinks that tie in with each of the 12 days of Christmas. A quick google search showed that I was by no means the first to think of this little ploy so I’m going to try to go for slightly more tenuous connections* rather than the obvious.
So, Day 1 - A Partridge in a Pear Tree…
Well, the pear bit is easy, you could have Kopparberg Pear Cider, or Babycham for that retro vibe (as a bonus it has a Christmassy deer/reindeer type thing on the label) or even a Poire Williams for a little bit more class. But what about the Partridge? At first, I thought, a partridge is a game bird, so is a Grouse… some kind of Grouse and pear concoction maybe? That seemed a bit of a cop out though so after a bit of digging I discovered that the Partridge in a Pear Tree was originally intended as a gift of fertility - partridges being the reproductive equivalent of rabbits in ye olde days, and fruit trees often used in fertility rites, such as wassailing.
Wassailing apparently involved pouring a mixture of cider, honey, spices and pulp from a burst apple around the base of the fruit tree. Hmm, sounds a lot like mulled cider to me so day one is going to be mulled cider, whether you choose to drink it while dancing around a pear tree is entirely up to you!
* Disclaimer: My choice of drink is not a recommendation or an endorsement of said product, it is solely to do with how well I think it ties in with the Day of Christmas in question. If it happens to be palatable, or even very tasty, then so much the better but no guarantees!
Whisky Impressions is run by Kate Watt. Previously at Springbank and then Glenfarclas, I now design some whisky related stuff and write about it, and anything else that takes my fancy, on this blog.