November 28, 2020

WSTA writes to Chancellor with three-point plan to ease Coronavirus burden on wine and spirit businesses

The Wine and Spirit Trade Association (WSTA) has today (7th April) written to Chancellor Rishi Sunak MP outlining three clear, simple steps that the government can take with immediate effect to offer to support to wine and spirit businesses amid Coronavirus chaos.

The WSTA has called on the Chancellor to extend immediately the support on offer to pubs, bars and restaurants to wider hospitality supply chain businesses, many of which have seen demand reduced to zero almost overnight, but which are currently deemed ineligible for much of the government’s support.

Furthermore, the WSTA has urged government to employ the same approach to excise duty as it does to VAT, and implement proactively a duty deferment scheme – in the same way it has for other taxes.

Spreading duty payments over the remainder of the year from the Summer would result in no loss of revenue to the Exchequer, but would provide a vital and welcome cash injection to businesses – which would help them to tackle the cashflow crisis, the single largest challenge for so many of these businesses, especially the smallest.

This cash injection, the WSTA argues, could prevent smaller businesses being lost amid current restricted trading conditions, and would help larger businesses maintain payments to other businesses throughout the sector.

Finally, the WSTA is asking for a simple technical fix – to allow businesses to put stocks of duty-paid wines and spirits back into excise suspense, thus allowing them to claim back duty already paid on products not yet sold and further ease cashflow pressures.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said: “We have welcomed the Chancellor’s efforts to date to help businesses and those they employ navigate the chaos that Coronavirus has wrought – but that much of the promised support has so far comes in the form of loans that are proving hard to access, take valuable time – and must eventually be paid back. Many businesses see these measures as providing nothing more than a stay of execution. The Chancellor needs to go further still.

“Today, we have written to government asking them to make 3 immediate changes that are simple, low cost and will provide immediate support to businesses in our sector. The extension of support to businesses in the hospitality supply chain – which have been almost completely forgotten despite facing the same immediate pressures – cannot come soon enough. Like pubs, bars and restaurants, the businesses that supply our hospitality sector have seen business reduce to zero almost overnight, but are currently barred from accessing schemes like business rates relief or small business grant funding. This must change – and fast!

“Government urgently needs to introduce measures to help businesses tackle the single biggest immediate challenge – cashflow. Our proposals to implement a blanket excise duty deferment scheme and to allow wine and spirit businesses to put stock back into duty suspense, would help alleviate the cashflow crisis immediately.

“It was disappointing that our calls for an urgent suspension of duty payments for at least six months were overlooked last week, and many of the businesses we represent have had to settle a large bill whilst knowing their ability to trade will be severely restricted for the foreseeable future. We would urge Chancellor Rishi Sunak to look again at this area, and take steps to offer our sector the support it needs.”