Alcohol Prices to Rise: Discover the Upcoming Increases
The drinks industry anticipates a rise in prices due to an increase in alcohol duty. Following the recent autumn budget announcement by Chancellor Rachel Reeves, alcohol duty rates will climb in line with Retail Prices Index (RPI) inflation. This increase, effective from Sunday, is set at 3.66%.
Impact of Alcohol Duty Increases
The adjustment in tax will significantly affect consumers. Manufacturers are primarily responsible for this duty, but industry leaders warn that elevated costs may ultimately be passed on to shoppers.
Details of the Price Increases
Official data outlines how various alcoholic beverages will be impacted by the duty hike:
- A typical bottle of gin (37.5% ABV) will see an increase of 38p, bringing the total to £8.98.
- A bottle of Scotch whisky (40% ABV) will increase by 39p, resulting in a new price of £9.51.
- Red wine at 14.5% ABV will have its duty rise by 14p.
The Wine and Spirit Trade Association (WSTA) reported that the duty on red wine has increased by £1.10 per bottle since the duty regime was established in August 2023.
Effects on Beer Prices
The British Beer and Pub Association anticipates that the cost of a pint in pubs may increase by about 2p. Overall, the industry will face a £130 million increase in costs.
Concerns from Industry Leaders
The UK Spirits Alliance has urged Chancellor Reeves to reconsider the current alcohol duty structure, advocating for a more balanced approach to taxes. Beverages with lower alcohol content, such as beer under 3.5% ABV, incur lower duties. This has prompted some breweries to lower the alcohol content of their products to mitigate costs.
Quotes from Industry Executives
Emma McClarkin, Chief Executive of the British Beer and Pub Association, expressed concerns that the price hikes are undesirable for both brewers and customers. She noted that brewers already contend with some of the highest beer duty rates in Europe. This new increase will further strain their profit margins.
Similarly, Miles Beale, chief executive of the WSTA, highlighted the complexities around pricing, particularly for wine. He suggested that additional costs, including national insurance contributions and business rates, leave businesses with no option but to increase prices, putting the burden on consumers.
Government Perspective
A Treasury spokesperson commented that alcohol duty is essential for maintaining fair public finances. This funding is crucial for public services that people depend on daily, reinforcing the government’s stance on the necessity of these tax increases.
