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Drinkers across the UK to face higher prices wine and spirits increased significantly Alcohol The tariffs will go into effect this Sunday, February 1st.
Industry leaders have warned that under increasing financial pressure, businesses have “no choice but to raise prices” to stay afloat.
this Tax According to the retail price index, taxes on alcoholic beverages will increase by 3.66% (retail price index) inflation, a measure confirmed in November autumn budget.
While the tariffs are levied directly on producers, industry leaders expect there will be a “trickle-down effect” with consumers ultimately bearing the brunt of these additional costs.
Official figures illustrate the impact: duty on a typical bottle of 37.5% alcohol by volume (ABV) gin will rise by 38p to £8.98 (including VAT).
Likewise, duty on a bottle of 40% alcohol Scotch whiskey will increase by 39p to £9.51. Red wine at 14.5% will attract an additional 14p duty.
The Wine and Spirits Trade Association (WSTA) highlighted that since the introduction of the new alcohol duty regime in August 2023, the 14.5% duty on red wine has now surged to £1.10 per bottle.
In response, the British Spirits Alliance, which represents hundreds of distilleries, urged headmaster Use the upcoming tariff review to boost growth, tackle “spirits discrimination” and develop a long-term strategy for the industry.
The tariff structure was overhauled in 2023, partly linked to drink strength, resulting in beer with an alcohol content below 3.5% paying significantly less tax.
This has prompted some beer brands such as Foster’s to reduce the tax rate to 3.4% in recent months to alleviate the cost of tariffs.
However, the latest price rise will affect beer sold in pubs and supermarkets, the first time pubs have been affected since 2017.
Emma McClarkin, CEO British Beer and Pub Associationsaid: “Unfortunately, these changes increase the likelihood of further price increases and no brewer or publican wants to put their customers through this.
“For brewers, they already pay some of the highest rates of beer tax. Europethis growth will put further pressure on their already slim profit margins and pose a risk to one of the UK’s world-renowned industries that produces some of the best beer in the world. “
WSTA CEO Miles Beale criticized governmentmethod: “Although Ober (Office of Budget Responsibility) finally admitted that rising prices led to falling revenue, government Failure to recognize that one’s own policies benefit no one.
“For the nation’s wine and spirits industry, the complexity of price changes, particularly for wines which are now taxed on a merit basis, means more headaches of red tape ahead.
“Added to all other costs – including national insurance contributions, business rates and waste packaging levy – businesses have no choice but to increase prices to stay afloat, which unfortunately means consumers will be hit again.”
Braden Saunders, spokesman for the British Spirits Alliance and co-founder of Doghouse Distillery battersea“, said of the timing: “The timing couldn’t be more ironic. Just as Dry January is drawing to a close and people are contemplating their first hard-earned drink, they are met with higher prices at the pub.
“The spirits industry has been viewed as a cash cow by successive governments and the industry has fallen on hard times.”
UKHospitality chief executive Allen Simpson echoed these concerns: “The hospitality industry is under constant price pressure and the cost burden on our industry is growing at an unsustainable rate.
“The increase in alcohol duty, while not paid directly by operators, is another pressure if it is passed on to businesses through higher drink prices. We strongly urge suppliers to show restraint when doing so and recognize the economic pressures facing the industry.”
A Treasury spokesman defended the policy, saying: “For too long the economy has failed to deliver for working people and cost-of-living pressures are still falling. That’s why we’re determined to help lower costs for everyone.”
“That’s why we’re reducing our energy bills by £150, adding national living wageending the two-child limit, introducing a free breakfast club for all primary school children and freezing fuel duty, train fares and prescription fees.
“We need to rebuild the public services we all rely on. We’ve invested record amounts of money into schools, NHS Give every child the best start in life and reduce waiting lists.
“Alcohol tax plays an important role in ensuring public finances remain fair and strong, funding the public services people rely on every day.”