TaxCorporate TaxGin loses its ‘edge’ as Brown’s tax rise bites

Gin loses its 'edge' as Brown's tax rise bites

Diageo, the alcoholic drinks manufacturer, has partially blamed the failure of a new gin drink on what it calls a 'tax rise' imposed in last year's Budget.

Link: Business week: High spirits at Diageo

The makers of Smirnoff Ice said it had decided to withdraw ‘Gordon’s Edge’ from the ‘ready-to-drink’ market because of ‘uncertainty due to the duty-driven RTD price increases’ according to the FT.

In his 2002 Budget Brown ended a concessionary tax treatment for ‘spirit-based coolers’, saying, tax levied on them ‘as a proportion of retail price was now lower than for any other type of alcoholic drink’.

Despite this, Diageo said it was still committed to the RTD market where it said it would continue to ‘invest and innovate’.

Other Diageo ‘alcopops’ include Smirnoff Black Ice, Smirnoff Mule, Archers Aqua, J&B Twist and Johnnie Walker One.

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