The price of a pint could rise by another 2p, with a bottle of wine up 13p, gin by 42p and whisky by 37p, if the Chancellor confirms an inflation-linked increase in alcohol duty in the Budget.
Drinkers were warned that John Healey's inaugural Budget could bring another rise in booze tax from next February. Alcohol has been taxed according to its strength since a shake-up was introduced in 2023, with the annual increase generally in line with the Retail Price Index (RPI), which tends to run higher than the Consumer Price Index.
Former Chancellor Rachel Reeves confirmed a 3.66% rise in all alcohol duties in last year's Budget.
Possible 3.9% rise based on September RPI
There is speculation that Mr Healey could use September's RPI of 3.9% as the basis for another increase in booze duties. That would take the duty on a £5 pint of beer from around 50p to 52p. VAT accounts for another 80p and other taxes a further 23p, according to trade body the British Beer and Pub Association (BBPA).
Emma McClarkin, CEO of the British Beer and Pub Association, said: "Currently our brewers are forced to pay some of the highest rates of beer duty in Europe, twelve times more than Germany and Spain."
She added: "This Budget, the Government has a real opportunity to build on their support for the sector by freezing beer duty and increasing the draught discount. This would be an undisputed win-win meaning more affordable pints, greater investment, and more jobs."
Industry calls to freeze or drop tax rises
Prime Minister Andy Burnham has sought to help struggling pubs with a promised 20% business rate cut, in a move widely welcomed by the industry.
The Wine and Spirit Trade Association has called on Mr Healey to drop any plans to raise alcohol tax further. It says that since the new alcohol taxation system was introduced, a 14.5% strength bottle of red wine has risen by 49% and is the highest taxed in Europe. Another 3.9% rise would increase the duty by 13p to £3.46 a bottle, with the tax on a 70cl bottle of gin up 42p to £9.27, and a bottle of Scotch up 37p to £9.89.
Tobacco duty also in focus
Smokers will also be watching for any further hikes in tobacco duty. Last year's Budget added 57p to a packet of 20 cigarettes, 28p per 10g of cigars, and 97p to a 30g packet of hand rolling tobacco. Another round of increases applied from the start of this month, with £1.21 added to a packet of 20 cigarettes, 81p per 10g of cigars, and £2.54 to a 30g packet of hand rolling tobacco.
