Price of wine and spirits to rise but pub pints to get cheaper after Budget 2024 announcement
by Ruby Flanagan · ChronicleLiveWine and spirit prices are set to climb following the confirmation of an alcohol duty increase by Rachel Reeves in today's Budget, while draught drinks will benefit from a tax reduction. The Chancellor has announced that rates on non-draught beverages will rise with inflation starting February 2025.
However, there's good news for pub-goers as draught duty on alcoholic drinks is to be slashed by 1.7%, which according to Reeves, means "a penny off a pint in the pub". This move comes as "nearly two-thirds of alcoholic drinks sold in pubs are served on draught", she explained, prompting cheers from MPs across the house.
Alcohol duty, the tax levied on manufacturers during production based on alcohol content, typically hits spirits and wines harder than ciders and beers due to their higher alcohol levels. While this cost is often passed to consumers, price hikes remain at the discretion of manufacturers.
Despite not dismissing potential future increases in beer, wine, and spirit taxes as part of a fiscal recovery strategy, the proposed hikes have already faced criticism from industry leaders. Miles Beale, chief executive of the Wine and Spirits Trade Association, highlighted the strain businesses are under from previous duty rises.
Last year, the former Tory Government rolled out the most significant Alcohol Duty increase in nearly half a century, slapping an additional 20% tax on over 85% of all wines in the UK and more than 10% on full-strength spirits. Commenting on the impact, he said: "Last year's damaging reforms to the alcohol excise duty system, including the largest single duty hike in almost 50 years, have hit businesses, consumers and the government purse. Increasing duty, which is the government's inherited policy, will serve only to reduce income to the government further at a time it can least afford it."
The recent announcement has been met with approval from the Institute of Alcohol Studies (IOAS), highlighting that targeting "cheap supermarket alcohol" would help "narrow the widening gap" between the affordability of pub and supermarket alcohol. Dr Katherine Severi, Chief Executive of IOAS, remarked: "With nearly 80% of alcohol now consumed off-trade, we are no longer a nation of pub drinkers. This has contributed to the devastating rise in chronic harms from alcohol, including deaths from alcohol-related liver and heart disease."
Dr Severi also pointed out the dual benefits of encouraging pub drinking: "There are both public health and economic reasons to move people back to drinking in pubs and not at home. In many areas, pubs are central to community life, promoting social cohesion in ways that solitary, home drinking cannot. People also tend to consume less alcohol in the on-trade, reducing overall alcohol consumption. And economically, hospitality requires far more employment than the off-trade, so could boost the economy."
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