Britons are being cautioned that the cost of their preferred alcoholic beverages will increase starting today due to a new tax hike, just after the conclusion of Dry January.
Alcohol duty has been raised by 3.66%, aligning with RPI inflation. This adjustment translates to an additional 11p for a bottle of Prosecco with 11% alcohol by volume (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).
This increase was confirmed in the prior Autumn Budget. Industry leaders in the wine and spirits sector have indicated that price adjustments are essential for businesses to remain viable.
In the previous year, drinkers experienced a 3.6% surge in alcohol duty, leading to an increase of 54p for wine and 32p for gin per bottle, while there was a reduction of 1.7% in draught duty, equivalent to a penny off a pint.
Concurrently, 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 risen by £1.10 since the recent alcohol duty structure was introduced in August 2023.
Alcohol duties are partially tied to the alcohol content of beverages. Several beer brands, including Foster’s, Carlsberg, Coors Light, and Sol, have lowered their alcohol strength in recent months to manage costs effectively.
Emma McClarkin, the chief executive of the British Beer and Pub Association, expressed concerns over the likelihood of further price increases and the strain it poses on the industry’s profitability. Miles Beale, chief executive of WSTA, emphasized the complexity of price changes, particularly for wine, which is now taxed based on its strength.
A Treasury spokesperson defended the alcohol duty increase, asserting its importance in maintaining fair public finances that support essential public services.
The figures provided by WSTA below illustrate the prices before and after the alcohol duty increment for various drinks.