Drink prices in the UK are set to rise from Saturday as new alcohol duty changes come into force, including an inflation-linked increase and the end of a temporary wine tax easement. While the duty on draught pints will be cut by 1.7%, non-draught alcohol will see a 3.6% increase in line with the retail prices index.
The changes mean a pint of average-strength beer will be 1p cheaper in pubs, but a bottle of gin will rise by 32p, a shot of whisky by 1p, and a 500ml bottle of 5% cider by 1p. Wine prices will be particularly affected as the 18-month easement period ends, replacing a single flat rate for wines between 11.5% and 14.5% ABV with 30 separate bands. This will increase duty by 2p per 0.1% ABV, with a 14.5% bottle seeing a 54p rise.
According to the Wine and Spirits Trade Association, prices on about 43% of wines will increase. Red wines are expected to be hardest hit due to their higher alcohol content. Sarah Coles of Hargreaves Lansdown noted that a 250ml glass of 13% wine will cost 8p more – half from inflation and half from the rule change – adding an estimated £10 million to consumer costs in the coming tax year.
Industry reactions have been mixed. The Treasury says the draught duty cut will reduce the hospitality sector's duty bill by £85 million, but Michael Kill of the Night Times Industry Association called the measures "meaningless" for businesses facing rising costs. Miles Beale of the Wine and Spirit Trade Association argued that higher duty rates reduce consumption and ultimately lower tax revenue, squeezing businesses and consumers.
