Britons are being cautioned that they will face higher costs for their preferred alcoholic beverages starting today due to an increase in taxes, coincidentally following the conclusion of Dry January.
Alcohol duty has been raised by 3.66%, aligning with RPI inflation. This adjustment will result in an additional 11p for a bottle of Prosecco with an 11% ABV, 14p for a bottle of red wine with a 14.5% ABV, and 38p for a bottle of gin with a 37.5% ABV, as reported by the Wine and Spirit Trade Association (WSTA).
The decision to raise the duty was finalized last year during the Autumn Budget. Industry leaders in the wine and spirits sector have indicated that price hikes are necessary for businesses to remain viable.
In the previous year, consumers experienced a 3.6% increase in alcohol duty, adding 54p to wine and 32p to gin per bottle, while draught duty saw a reduction of 1.7%, equivalent to a penny off a pint.
Additionally, a new taxation system was implemented where wine is taxed based on its strength. WSTA highlighted that the tax on a bottle of 14.5% red wine has escalated by £1.10 since the revised alcohol duty structure was introduced in August 2023.
Alcohol duties are influenced by the potency of drinks. Several beer brands, such as Foster’s, Carlsberg, Coors Light, and Sol, have reduced their alcohol content recently to mitigate expenses.
Consumer rights expert, Martyn James, criticized the timing of the alcohol duty increase coinciding with the end of Dry January, pointing out the added burden on those trying to moderate their alcohol consumption.
Emma McClarkin, CEO of the British Beer and Pub Association, expressed concerns over potential further price increases due to the recent tax adjustments, noting the strain it places on brewers and publicans.
Miles Beale, CEO of WSTA, highlighted the increased complexities in pricing changes, particularly for wine under the new tax structure based on strength, leading to more challenges for businesses in the sector.
A spokesperson from the Treasury emphasized the importance of alcohol duty in maintaining fiscal stability and supporting essential public services.
The following figures, provided by WSTA, illustrate the prices before and after the alcohol duty hike for various alcoholic beverages.