Supplementary memorandum from the Gin
and Vodka Association of Great Britain
In anticipation of our appearing before you
to give evidence, I have pleasure in forwarding our Budget Submission
that has been sent to the Chancellor. This highlights five points.
Move to Scotland
Following consolidation in our industry, 75
per cent of UK produced gin and vodka now comes off the bottling
line in Scotland. This has a major impact on the economy.
The Association, which represents the largest
sector of the UK spirits market, has expressed its appreciation
already to the Chancellor for the present standstill in Excise
on spirits. This was a welcome step in the reduction of the discrimination
against spirits. We are seeking continuation of this process.
Competitiveness Price Pressures and Increased
Our sector is a successful part of an industry
that has done much to help itself, but the justifications that
warranted last year's freeze remain applicable today and are illustrated
in this Submission. We are seeking the Chancellor's assistance
to meet the cumulative burden of tax, regulation, competitive
pressures, extra costs and tight margins. This is impacting on
our industry, notably on our small and medium sized companies.
Of note is the impact of oil prices, the net cost of the Climate
Change levy and the loss of Export Refunds. Contracts are now
going to overseas producers. In consequence, our industry's requirement
for Scottish raw materials may reduce.
Increase in Tax per Bottle.
The amount of Tax per bottle has increased in
the last two years in the spirits market. This is particularly
true in "Cheapest on Display" in supermarkets where
much of the growth has occurred but where our small members' margins
are tightest. The tax in this part of the market has now increased
in each of the last three years to reach over 86 per cent per
bottle. This is explained in the attached submission.
The GVA's Submission
The rate of excise is close to the point of
revenue maximisation. It is still discriminatory against spirits.
Given the pressures that our sector is facing when tax per bottle
has increased, we are seeking a reduction in excise tax in the
order of 4 per cent.
We welcome the opportunity to discuss these
points with you and your committee.
The Gin and Vodka Association
6 "Budget Submission, December 2000"
is available from the Gin and Vodka Association of Great Britain. Back