Britons are being cautioned about an increase in the prices of their preferred alcoholic beverages starting today due to a new tax hike, coincidentally following the conclusion of Dry January.
Alcohol duty has surged by 3.66%, mirroring RPI inflation. This adjustment translates to an additional 11p for a bottle of Prosecco with 11% alcohol by volume (ABV), 14p for a bottle of red wine with 14.5% ABV, and 38p for a bottle of gin with 37.5% ABV, as per the Wine and Spirit Trade Association (WSTA).
The decision to raise these rates was finalized last year during the Autumn Budget. Industry leaders in the wine and spirits sector have expressed that raising prices is a necessary step for businesses to maintain viability.
In the previous year, consumers faced a 3.6% surge in alcohol duty, resulting in an extra 54p for a bottle of wine and 32p for gin, while draught duty saw a reduction of 1.7%, equating to a penny off a pint.
Simultaneously, a new taxation system was introduced, which now levies wine based on its strength. WSTA reports that the tax on a bottle of 14.5% red wine has risen by £1.10 since the recent alcohol duty regime was implemented in August 2023.
Alcohol duties are partially influenced by the potency of beverages. Several beer brands, including Foster’s, Carlsberg, Coors Light, and Sol, have lowered their alcohol content in recent months to manage expenses.
Emma McClarkin, the chief executive of the British Beer and Pub Association, expressed concerns about the likelihood of further price hikes due to these changes, emphasizing the strain it puts on brewers’ margins and the renowned beer industry in the UK.
Miles Beale, chief executive of WSTA, highlighted the increasing complexities in pricing adjustments, particularly for wine under the new strength-based taxation system, leading to more administrative challenges for businesses.
A Treasury spokesperson emphasized the role of alcohol duty in maintaining robust public finances to support essential public services.
The provided figures by WSTA illustrate the price differences before and after the alcohol duty increase for various drinks.