Wine Set to Overtake Beer as Taxmans Favourite Tipple

The taxman is cashing in on Britain's growing taste for wine.

The Office for Budget Responsibility (OBR) forecasts released as part of the Autumn Statement shows that wine drinkers will pay an extra £1.6bn in duty over the next five years.

The total wine duty revenue of £3.3bn forecast for the current tax year would rise to £4.9bn in 2016/17, according to the OBR.

If the forecasts are correct, wine will overtake beer as the single biggest contributor of duty tax to the Government, within the alcoholic drinks sector.

Beer and cider duty receipts are only expected to rise by 14% over the same period, to £4.1 Billion.

The Chancellor, George Osborne, confirmed in his last Budget that the Coalition would keep the duty 'escalator' introduced by the last Labour government, under which alcohol duties increase by two per cent above inflation until 2015.

With inflation at more than 5pc, consumers will see tax increases of around 7.2pc, equating to 35p more on a typical 75cl bottle of wine.

Angela Beech of the accountancy firm Blick Rothenberg said:

"The OBR forecasts indicate a clear attack by the Government on wine drinkers, as the duty expected to be levied rises from £3.1 Billion to £4.9 Billion by 2016/17.

She added: "This is an increase of 58pc over the next six years. The biggest increase seems to happen in 2016, with a 10pc increase in one year alone. In comparison, the duty on spirits, beer and cider will have a moderate increase over the same period.

"Historically the Government has always gone for spirits, beer and cider; and now the last bastion, wine, is set to fall."

A spokesman for the British Beer & Pub Association said: "These independent projections represent clear and worrying evidence that the Government is on the wrong path when it comes to beer taxation. Their current policy is set to reduce Government revenues from, beer in real terms. They forecast that project beer consumption is expected to drop by 17 per cent by 2016, while wine will rise by 18 per cent. "

"The present policy will clearly cost more jobs in Britain's brewing and pub industry."