Britons are facing higher prices for their preferred alcoholic beverages starting today due to a recent tax increase, coinciding with the end of Dry January.
Alcohol duty has gone up by 3.66%, aligning with RPI inflation. This translates to an additional 11p for a bottle of Prosecco with 11% ABV, 14p for a bottle of red wine with 14.5% ABV, and 38p for a bottle of gin with 37.5% ABV, as reported by the Wine and Spirit Trade Association (WSTA).
The decision to raise duties was made last year during the Autumn Budget. Industry leaders in the wine and spirits sector have expressed concerns, stating that price hikes are necessary for businesses to remain viable.
In the previous year, consumers experienced a 3.6% increase in alcohol duty, leading to a 54p rise in wine prices and a 32p increase for gin, while draught duty saw a reduction of 1.7%, equivalent to a penny off a pint.
Additionally, a new taxation system based on the strength of wine was introduced recently. WSTA highlighted that the tax on a bottle of 14.5% red wine has surged by £1.10 since the revised alcohol duty regime was implemented in August 2023.
Alcohol duties are tied to drink potency, prompting some beer brands like Foster’s, Carlsberg, Coors Light, and Sol to lower their alcohol content to cut costs.
Emma McClarkin, the Chief Executive of the British Beer and Pub Association, expressed concerns about potential price increases due to the recent changes, emphasizing the impact on brewers’ profit margins and the UK’s renowned beer industry.
Miles Beale, CEO of WSTA, mentioned the challenges posed by pricing adjustments, particularly for wine, which is now taxed based on strength, leading to increased administrative burdens for businesses.
The Treasury justified the alcohol duty increase as crucial for maintaining public finances and supporting essential public services.
The figures provided by WSTA demonstrate the price differences before and after the alcohol duty hike for various alcoholic beverages.
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