The spirits sector has said the Autumn Budget was both “breath-taking” and a “disappointing blow” for those in the industry.
Chancellor John Healey delivered his first Budget yesterday and in doing so, revealed an increase in alcohol duty.
The Wine and Spirit Trade Association (WSTA) said with RPI set at 4.55% tax will go up by 14p on a bottle of Prosecco, 18p on a bottle of 14.5% abv red wine and 49p for a bottle of gin, from 1 February next year.
They added that when the duty increases kick in tax on a bottle of 14.5% red wine will have gone up by £1.50 (56%), port will have gone up by £2.19 (61%) and a bottle of gin will have risen by £2.15 (25%) in the three and half years since the introduction of the UK’s new alcohol taxation system in August 2023.
Instead of the Government fulfilling its aim for providing breathing space and growth in every postcode, this eye watering tax raid will result in suffocating the British drinks sector, who will have no choice but to pass on price rises to cash strapped consumers.
Miles Beale, chief executive of the Wine and Spirit Trade Association, said: “It’s a breath-taking hike. No-one will be toasting this record breaking 4.55% RPI increase on top of rising inflation – most of all British consumers who will be paying for this. Instead of providing breathing space in a cost of living crisis the Chancellor’s alcohol tax hikes will further suffocate British business and serve up nothing for consumers.
“The only way to give families and businesses some support in an economic crisis is to stop the hikes, look at the numbers and listen to those being impacted. The old tactics are not working for anyone. Increasing alcohol duty is not boosting Treasury funds, but it is closing down businesses and pricing consumers out of a bit of joy in their shopping basket.
“If Government is serious about providing growth in every postcode it has stop piling on the pain for businesses and consumers across the country and show its support to the UK drinks sector. ”
And in Scotland, Mark Kent, chief executive of the Scotch Whisk Association said the spirits duty increase announced by the Chancellor “is a disappointing blow to the Scotch Whisky sector, its supply chain and the local communities it supports”.
He explained: “Another duty increase – the fourth in as many years – will see the tax burden on the average bottle of Scotch Whisky rise to 74%. Further support has been offered to small brewers and cider makers, excluding small producers in the spirits sector which is hugely important to the Scottish economy. The fact remains that consumers who don’t choose to drink pints – and the hospitality businesses who rely on spirits as part of a diverse and modern offering – are being unfairly penalised.
“We’ve repeatedly warned that increasing the spirits super tax will not only pile further costs on distillers, but will harm the supply chain and reduce Treasury revenue. Nobody wins when hard-pressed businesses are taxed to the hilt.
“The UK Government should listen to business and pay attention to the evidence. We will fully consider the findings of the evaluation report published today and press the Treasury for systemic reform to provide greater fairness for Scotch Whisky. Today’s decision to increase duty, alongside the inherent imbalance at the heart of the current duty system, puts further pressure on the sector, stalls investment and ultimately limits our ability to generate growth.”
