Britons are set to see an increase in prices for their preferred alcoholic beverages starting today due to a new tax hike that coincides with the conclusion of Dry January. The alcohol duty has been raised by 3.66%, in line with RPI inflation, resulting in additional costs for consumers. For instance, a bottle of Prosecco with 11% alcohol by volume (ABV) will now have an extra 11p, while a bottle of red wine with 14.5% ABV will see a 14p increase, and a bottle of gin with 37.5% ABV will cost 38p more, as reported by the Wine and Spirit Trade Association (WSTA).
This uprating was planned during the Autumn Budget last year, and wine and spirits industry leaders have indicated that price hikes are inevitable to maintain business sustainability. In the previous year, alcohol duty saw a 3.6% rise, resulting in an additional 54p for a bottle of wine and 32p for gin, while draught duty experienced a 1.7% reduction, equivalent to a penny off a pint.
Moreover, a new taxation system was introduced, where wine is taxed based on its strength. According to WSTA, the tax on a bottle of 14.5% red wine has increased by £1.10 since the latest alcohol duty structure was implemented in August 2023. Alcohol duties are influenced by the potency of beverages, leading several beer brands like Foster’s, Carlsberg, Coors Light, and Sol to lower their alcohol content recently to cut expenses.
Emma McClarkin, the chief executive of the British Beer and Pub Association, expressed concerns about potential price hikes resulting from these changes, emphasizing the strain it puts on brewers and publicans. Miles Beale, chief executive of WSTA, highlighted the complexities in pricing adjustments, particularly for wine taxed by strength, predicting more challenges for businesses. A Treasury spokesperson defended the alcohol duty increase, stating its significance in maintaining public finances for essential services.
The WSTA provided figures displaying the price adjustments before and after the alcohol duty elevation for various drinks.