Chancellor John Healey is expected to announce an increase in alcohol duty at tomorrow's Budget, adding 2p to the price of a pint of beer and putting further financial pressure on drinkers, pubs and hospitality businesses.
The increase is expected to be in line with the Retail Prices Index (RPI) measure of inflation, which is currently running at 3.9%. If implemented, the change would raise duty on a pint of beer from 50p to 52p. Duty on a bottle of wine is also expected to rise by between 10p and 12p depending on its strength, while a bottle of gin with an alcohol content of 37.5% could see duty increase by 35p.
Industry calls for a freeze
Drinks industry representatives have urged the Government to freeze alcohol duty, warning that further increases could deepen the financial difficulties facing businesses and consumers. Several industry groups have called on the Chancellor to drop the plans.
Miles Beale, chief executive of the Wine and Spirit Trade Association, urged the Chancellor to "support not squeeze" the drinks sector. He said: "The Chancellor cannot control global fuel prices, but he can put the brakes on relentless and punishing alcohol tax increases, which have consistently failed to raise revenue. He needs to change the record – because it’s broken."
Impact on brewers and jobs
Emma McClarkin OBE, chief executive of the British Beer and Pub Association, said last month: "At a time when young people are finding it really tough to find work, supporting the beer and pub sector would mean Government are helping us create much-needed jobs."
She added: "Our brewers are forced to pay some of the highest rates of beer duty in Europe, twelve times more than Germany and Spain. Freezing the tax at its current rate, rather than the current planned increase, will start to bring our brewers closer in line with our European counterparts."
According to the BBPA, beer duty accounts for up to 40% of the wholesale price of beer, with British brewers paying some of the highest rates in Europe. A Treasury spokesperson told The Telegraph: "As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals."
