Managing Director of Mangrove Global and long-time spirits aficionado, Nick Gillett, has spoken out against the continuing punitive tax regime that’s destroying the UK’s hospitality and spirits industries. After the highest increase in alcohol duty, that the UK’s seen in almost 50 years, was implemented in August this year, the UK Government has agreed that the duty will remain frozen until 1 August 2024 – a small relief. Nick says that it’s time for the spirits, hospitality, and retail industries to speak up before any more damage is done.
“There’s no doubt that this is a government that fails to understand the needs of both the spirits and hospitality industries. And whilst there were a range of small wins delivered in the Autumn Statement, we are still operating in an environment which is hard to do business in. Especially if you make or sell alcohol.
“Once the golden goose of British industry, the thriving hospitality sector is now on its knees. It has rebuilt to some degree, but with the soaring cost of goods, inflation, and hostile tax regimes – what chance does it have? Add to that soaring wage bills and the devastating alcohol duty and we are going to see venues, spirits producers, and even retailers shut up shop for the last time. We need to speak up to minimise the damage that’s coming.”
As a result of increasing alcohol duty, the tax paid on your average 40% ABV bottle of gin, now works out at somewhere 62% of the bottle’s value – leaving behind a small sum to be shared by the producers, retailers, bars, and other parts of the supply chain; especially once production costs are deducted. And the effects of cutting margins are felt far and wide across hospitality and retail alike.
In October, research carried out by CGA by NIQ revealed that the number of hospitality venues in the UK dropped below 100,000 for the first time on record; an equivalent of six closures per day over the last twenty years. With the Chancellor’s Autumn Statement also announcing an increase in the Living Wage, no National Insurance reductions for employers, and the sky-high winter fuel bills to look forward to – costs for venues are once again, on the up. Given that venues are the back-bone of many city economies across the UK, you’d expect the Government to be more concerned:
“The hospitality industry is a key employer and has shown time and time again that it can drive economic recovery,” said Nick.
“In such a challenging environment, it’s the independent venues that will struggle, and that ultimately means less choice for customers. Mainly big business will survive – and that too will happen with spirits producers. The lack of tangible, financial help will leave only the conglomerates able to play and stay stocked on supermarket shelves. In my opinion – that’s a devastating consequence for the consumer.”
There are four months left until the Spring Budget is announced, so Nick is calling for producers, venues, and retailers to get behind any lobbying campaigns that might take place before then and, of course, for everyone to support their local venues:
“With the upcoming festive season approaching I ask everyone to support their local venues this Christmas. And while you’re there, sample a brand of spirit you haven’t tried before and make the most of the selection available to you.
To those in the industry, all we can do is speak up and try to better the Government’s understanding of what we do. What the Autumn Statement has given us is evidence that the Government are hearing what’s being said. At this point, it’s just unclear if they’re willing to listen.”