Alcohol prices go up as tax increases come into effect

Chancellor Philip Hammond included increases to the duty paid on some alcohol in his October Budget. They come into effect this month and retailers usually pass on such tax rises to their customers.

Which alcohol is going up in price?

Some high strength sparkling cider and wine will be rising by the Retail Price Index inflation rate. Basically, that will translate at about 8p extra on a bottle of wine.

The good news is that other cider, spirits and beer is all frozen at the same rate. So no price increases there.

Should we be toasting HMRC?

This is seen by the Treasury as a supportive measure that is a better deal than the trajectory of alcohol duty placed on alcohol before 2013. If duty on alcohol had continued to rise at the same rate, a bottle of Scotch would be £1.50 more, a pint of cider would be up by 4p and a pint of beer would be going up by 14p.

Whilst visiting a brewery in Liverpool, Chancellor Hammond said: “In recognition of the important contribution of British pubs and drinks makers to our communities, I have frozen taxes on beer, cider and spirits again this year. These duties would have otherwise come into effect today but instead we’re supporting an industry that employs 900,000 people across the UK. Whether it’s local pubs, craft cider mills or independent distillers, this government is helping these businesses to thrive and ensuring they remain at the heart of our economy.”

What does the industry think?

The government considers this comparatively small rise in alcohol tax as £4.4million boost to the alcohol industry since 2013.

Chief Executive of Society of Independent Brewers (SIBA), Mike Benner agrees:

“The freeze in beer duty is good news for UK brewers, publicans and beer drinkers. A planned rise in line with inflation would have meant a £100 million hit to Britain’s brewers. We will be toasting the Chancellor this week with a well-deserved pint. Small Brewers Relief has been a great success in enabling the explosion in the number of craft breweries and the world-beating beer they brew. Positive reform is now required in order to ensure it continues to support a healthy and sustainable sector and this review will help to deliver that.”

It is hoped that the innovation shown by small brewers and distillers will continue to rise, providing the UK with valuable exports. Long may the ‘ginaissance’ continue.

So, a few pence on a bottle of wine, is the main takeaway here. A very definite case of ‘it could be worse’.