Business bosses react to chancellor’s budget

Richard Smith, owner of The Wine School of Cheshire, said the increase in alcohol duty last year was a factor for inflation remaining high.

“The cost of alcohol has gone up 20% since August last year,” he said.

“If it was lower people would perhaps have that second glass or second bottle so they would spend more in a venue they’re in or a shop – and that puts more into the exchequer through VAT etc.”

Mr Smith did welcome the fact that the alcohol price had not gone up further.

“There are a lot more complications to come because it’s going to be based in the future on percentage of alcohol,” he said.

The last year had produced the toughest trading conditions of recent times, including those during the pandemic, he explained.

“If you spend £5 on a bottle of wine you actually get 32 pence of wine in it,” he said.

“The majority of the balance goes to the exchequer – there’s a bit for transport, and a small profit for the retailer.

“A huge chunk of that is VAT as well as excise, because we get VAT on the whole product, which includes excise duty, just like fuel is.”

He said the industry would welcome a cut in VAT on hospitality, but appreciated the difficult economic circumstances the country is facing.