Britons are facing higher costs for their preferred alcoholic beverages starting today due to a recent tax increase that coincides with the end of Dry January. Alcohol duty has surged by 3.66%, in line with RPI inflation, resulting in price hikes of 11p for a 11% ABV Prosecco bottle, 14p for a 14.5% ABV red wine bottle, and 38p for a 37.5% ABV gin bottle, as reported by the Wine and Spirit Trade Association (WSTA).
This uprating was announced last year during the Autumn Budget. Industry leaders in the wine and spirits sector have expressed concerns, stating that businesses are compelled to raise prices to maintain their operations. In the previous year, consumers saw a 3.6% increase in alcohol duty, raising prices by 54p for wine and 32p for gin, while draught duty was reduced by 1.7%, equivalent to a penny less per pint.
Additionally, a new taxation system was introduced where wine is taxed based on its strength. WSTA highlighted that the tax on a 14.5% red wine bottle has climbed by £1.10 since the revised alcohol duty regime was implemented in August 2023.
Alcohol duties are influenced by the potency of beverages. Several beer brands, such as Foster’s, Carlsberg, Coors Light, and Sol, have adjusted their alcohol content in recent months to cut costs.
Emma McClarkin, the chief executive of the British Beer and Pub Association, expressed concerns over the likelihood of further price increases due to the recent changes, affecting both brewers and customers. Miles Beale, chief executive of WSTA, emphasized the complexities of price adjustments, particularly for wine, leading to more challenges for businesses to navigate.
In response, a Treasury spokesperson defended the alcohol duty hike, stating its significance in maintaining public finances and supporting essential public services.
The WSTA provided a breakdown of the price adjustments before and after the alcohol duty increase for various alcoholic drinks.
