Increase in alcohol duty raises concerns for UK spirits industry
A senior ally of Sir Keir Starmer has warned that the Budget is “punishing” bars as punters pay more for booze from today, reports BritPanorama.
Labour MP Carolyn Harris described the rise in alcohol duty as “hugely damaging” for Britain’s spirits industry. She noted that distillers and the businesses they support are “being punished.” The tax on alcoholic drinks has increased by 3.66 percent due to changes enacted by Chancellor of the Exchequer Rachel Reeves.
As consumers reflect on the end of Dry January, the new duty means that a typical bottle of gin will now cost £8.98 after VAT, an increase of 38p. Similarly, a bottle of Scotch whisky will see its price rise by 39p, while the duty on a bottle of red wine will increase by 14p.
Harris, who chairs the All-Party Parliamentary Group for UK Spirits, expressed concern that the tax rise hits people seeking to unwind after work. She stated, “Pub owners consistently tell me that spirits are among their most profitable products – so this tax rise compounds the difficulties they’re already facing.”
In her call to the government, she urged ministers to ensure that the upcoming duty review is comprehensive and addresses the serious pressures on the industry. “Our spirits sector creates jobs, opportunity, and employment. We must let it thrive,” she added. This increase follows an £80 million financial lifeline announced for pubs and music venues.
The Conservative party labeled the measures, which provide an average saving of £1,650 for pubs, as a “sticking plaster.” This sentiment reflects a broader belief that while financial support is offered, it may not adequately address the ongoing challenges within the hospitality sector.
Concerns for the future of landlords and distillers
Harris reflected the concerns within the industry, remarking on the difficulties faced by spirits producers, who are subject to higher taxes compared to beer and wine. “Today, another increase to excise duty will take effect, meaning that prices for consumers will no doubt be forced up again – just as people are looking forward to a well-deserved drink at the end of Dry January,” she said.
She underscored the need for a thorough review of excise duty rather than a superficial examination, emphasizing that the UK spirits industry has significant potential but requires support to flourish.
A Treasury spokesperson emphasized the necessity of rebuilding public services, asserting that “alcohol duty plays an important role in ensuring public finances remain fair and strong and funds the public services people rely on every day.”
This increase in alcohol duty arrives amid ongoing discussions about the sustainability of the hospitality sector in the face of rising costs and consumer behavior changes, raising questions about the long-term viability of bars and spirits producers in the current economic landscape.
