Darling's tax hike hits wine this Christmas

The vast majority of shoppers will be paying more for wine this Christmas after the government's duty hike ?to the fury of the UK drinks industry.

Chancellor of the Exchequer Alistair Darling has announced he will raise alcohol excise duty again, just in time for the crucial Christmas trading period.

While he is temporarily cutting VAT to 15% from 1 December, he is simultaneously increasing excise duty rates by 8%.

The overall effect will be an increase in the cost of the most popularly priced wines and spirits.

The measures unveiled in the Pre-Budget Report sparked a furious reaction from the Wine & Spirits Trade Association (WSTA).

'The Chancellor has turned into Santa Claws, snatching scarce pleasure from millions of people,' said chief executive Jeremy Beadles.

Following the excise duty increases in the Budget earlier this year, the announcement means that duty will have risen by 17% during 2008.

The Government is already committed to raising duty rates by a rate of 2% above inflation in each of the next four years.

WSTA figures suggest that more than 80% of shoppers will be paying more for wine this Christmas following the Chancellor's statement.

The combination of a VAT cut and duty hike have a disproportionate effect on cheaper products, where duty accounts for a bigger share of the overall price. As such, a £4 bottle of wine will cost £4.05 after 1 December, but a £6 bottle will cost £6.01.

'It is staggering that a Government which claims to act in the interests of the many, not the few, wishes to punish ordinary, hard-working consumers who wish to spend the little cash they have left on a drink,' said Beadles.