Drinkers face higher alcohol prices from tomorrow as duty rates increase by 3.6 per cent in line with inflation.
The tax hike will see significant rises across various alcoholic beverages, with spirits and wines particularly affected due to their higher alcohol content.
The changes come as part of a new system that taxes wines and spirits based on their strength, while also implementing the general duty increase.
Manufacturers typically pass these duty costs onto consumers, though the final retail price increases remain at their discretion.
A bottle of gin will see duty rise by 32p under the new rates. Wine drinkers will face a 54p increase on bottles at 14.5 per cent ABV (alcohol by volume).
The changes follow a temporary reprieve introduced by the Conservative government, which had kept wines between 11.5 per cent and 14.5 per cent ABV taxed at a flat rate of 12.5 per cent.
Sherry, port, cream liqueurs, and canned beer will also see duty increases from tomorrow, February 1.
Alcohol prices set to rise as dry January wraps up
GETTY/PA
There is some relief for pub-goers, with duty on draught products being cut by 1.7 per cent. This reduction means a penny off each pint pulled in pubs. Champagne and sparkling wine drinkers will also benefit, with duty reduced by 2p on bottles at 12 per cent ABV.
The government’s draught relief policy aims to make pub-served beer more affordable than supermarket options.
The move is designed to encourage more people to support their local pubs, creating a clear price difference between draught beer and off-licence sales.
The latest duty increases follow significant hikes introduced in August 2023, which were the largest in almost 50 years.
Those changes added 20 per cent to excise duty on more than 85 per cent of all wines in the UK market.
Full-strength spirits also saw duty rise by more than 10 per cent in that round of increases.
LATEST DEVELOPMENTS:
The impact of these changes is already visible, with HMRC figures showing alcohol tax receipts have fallen by £209 million in the financial year to December 2024 compared to the previous year.
The Wine and Spirit Trade Association (WSTA) has calculated that a 14.5 per cent ABV bottle of red wine will have seen a total price rise of 98p over 18 months when accounting for all duty increases since August 2023.
Further price rises are on the horizon, with new waste packaging recycling fees coming into effect in April. These additional charges will add 12p to the cost of a bottle of wine.
Spirit drinkers will face an even higher impact from the packaging fees, with an extra 18p being added to each bottle.
The combined impact of successive duty increases and new fees means consumers should prepare for substantially higher prices on their preferred drinks.
WSTA chief executive Miles Beale said: “The Government continues to claim that the tax hikes are part of their big plan to plug the black hole in the public finances, but a series of record-breaking tax levies are doing the exact opposite. There are no winners under the UK’s punishing alcohol tax regime.
Cambridge Wine Merchants co-founder Hal Wilson described the changes as “death by a thousand cuts.”
He said: “We sell over 2,000 different wines each year and from February will need to know the precise ABV of each and every one before being able to calculate their full cost.
Treasury minister James Murray emphasised the Government’s commitment to supporting the pub industry.
He said: “Our pubs and brewers are an essential part the fabric of the UK and our brilliant high streets.”
Richard Naisby, chairman of the Society of Independent Brewers and Associates, welcomed the changes to draught relief.
He said: “The Government’s increased investment in draught relief means that draught beer sold in our community pubs has a lower rate of alcohol duty than beer sold in supermarkets and should encourage more people to support their local.”
