Drinkers dealt huge blow as some alcohol duties face crippling hike

Budget 2021: Sunak announces changes to alcohol duties

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Wine drinkers and people who enjoy tipples like whisky, gin and vodka, are set to face the biggest tax rise on alcohol since the duty was brought in in 1643. The 12.6 percent RPI increase was first introduced by the then-Chancellor Rishi Sunak last year, with today’s Autumn Statement confirming it is still going ahead.

Under the new system, draught beer, prosecco, and other drinks will go down in price as taxes are being slashed on them.

Meanwhile, the duty levied on drinks with alcohol content above 11 percent is increasing.

Ex-Chancellor Kwasi Kwarteng announced plans to freeze alcohol duties from February 2023 at September’s mini-Budget.

But Jeremy Hunt cancelled that when he took over.

Speaking earlier this year, the boss of the Wine and Spirit Trade Association said the Chancellor’s new system is “worrying for wine businesses” and “costly for consumers”.

Miles Beale said: “It’s a mystery to us why the Government is determined to drown any potential Brexit benefits under lashings of elective new red tape.”

Mr Beale said: “The benefits of abolishing costly and time-consuming VI-1 wine import certification and some smaller changes to EU regulations will be blown out of the water if the Government ploughs ahead with complex, unfair and unworkable changes to the alcohol duty system.”

“This is existentially worrying for wine businesses today. It would also be costly for consumers, who would see 70 percent of all wines rise in price – 80 percent of still wine, 95 percent of red wine and 100 per cent of fortified wines.”

The changes are taking effect in 2023 and, branded a “radical simplification”, are set to create a “fairer and healthier” system based on the following principle – “the stronger the drink, the higher the rate”.

Beer is set to see the biggest duty cut in 50 years. But other drinks, because they are “currently undertaxed given their strength”, as justified by Mr Sunak last October, will see price hikes difficult to digest for companies and drinkers.

For instance, according to industry estimates, white wines such as Hardys Crest and Yellow Tail chardonnays (both £7), which have an alcohol by volume (ABV) of 13 percent, will go up by 35p a bottle.

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The then-Chancellor argued the move would contribute to ending an age of cheap high-strength drinks that “harm public health and enable problem drinking”.

But Mr Beale, accusing the Government of ignoring the impact on an industry that employs 130,000 people, is worth £11billion annually in sales and already pays £4.4billion in duty, said the move could put the UK’s status as an international wine-trading hub at risk.
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