Cost of wines and spirits set to rise with alcohol duty shake-up
By David Wood | 1st August 2023
A major shake-up of the way alcohol is taxed could leave many drinks costing more from today.
The Treasury's new "common-sense" principles will see tax levied according to a drink's strength.
Duty will increase overall, with most wines and spirits seeing rises, but will fall on lower-alcohol drinks and most sparkling wine, the BBC reported
Taxes on draught pints will not change in a measure designed to support pubs.
Alcohol duties have been frozen since 2020. These changes were originally scheduled for February this year but were postponed by Chancellor Jeremy Hunt as the cost-of-living crisis continued.
With prices still rising, albeit at a slower rate, the government is going ahead with a 10.1% rise in alcohol duties, and is also overhauling the system.
Drinks with alcohol by volume (ABV) below 3.5% will be taxed at a lower rate, but tax on drinks with ABV over 8.5% will stay the same, whether it is wine, spirit or beer.
As a result, sparkling wine, which was previously taxed at a higher rate than still wine, will be 19p cheaper, for a standard-strength bottle, if retailers pass on the tax changes by lowering prices. A can of pre-mixed gin and tonic would be 5p cheaper.
Tax on a typical bottle of still wine with ABV 12% will go up by 44p, but on wine with 15% ABV, tax will rise by 98p, according to the Wine and Spirits Trade Association (WSTA).
Spirits and fortified wines, such as sherry and port, will see steep rises.
Mr Hunt said: "The changes we're making to the way we tax alcohol catapults us into the 21st century, reflecting the popularity of low-alcohol drinks and boosting growth in the sector by supporting small producers financially."
The government said the new system of duties had been made possible by the UK's departure from the EU, and that it would support "wider UK tax and public health objectives".
Prime Minister Rishi Sunak said lower duties on draught beers and ciders would reduce the price of a pint and support pubs.
Tax on draught beer in pubs will be up to 11p lower than tax on supermarket beer as a result of the changes - a measure that was announced in the Budget earlier this year.
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