Yahoo Finance ‘Crippling duty hikes’ to raise prices for 90% of wines sold in UK
Booze brands are likely to increase prices as the alcohol duty freeze ends
Alcohol in the UK is about to get a lot more expensive as wine duty is set to increase by 20% and spirits duty by over 10%.
Alcohol duty will be unfrozen on 1 August and all alcohol will be taxed by strength, meaning higher ABV drinks will be taxed more heavily, leading to price rises for 90% of wines sold in the UK.
Miles Beale, chief executive of the Wine and Spirit Trade Association, said: “We are careering towards an extremely tough period for wine and spirit businesses with tax hikes and other costs, including a prolonged cost of living crisis for their consumers, persistently high inflation – especially for food and drink – and rocketing prices for glass, leaving little room for many businesses to turn a profit. Inevitably some won’t be able to stay afloat, with SMEs most at risk.
Read more: How to weather the looming debt crisis
“Amongst all this pressure the government has chosen to impose more inflationary misery on consumers on 1 August, with the biggest single alcohol duty increase in almost 50 years. But it’s not too late to scrap these crippling duty hikes.”
Premium products such as gin, vodka and whisky must contain a minimum strength prescribed by law.
Vodka is set to see a 10% rise in cost following the duty changes. The duty increase will also impact fortified wines, including sherry and port, which will see duty rise by 44%, adding around £1.50 to a bottle.
“In the end the Sunak-Hunt changes to wine duty will reduce consumer choice and push up prices. For spirits you can expect at least a £1 increase on a bottle of gin or vodka and a leap of £1 per bottle of wine when duty is increased by 20% (+VAT),” Beale warned.
Read more: UK households warned energy bills may spike this winter
Brighton Gin co-founder Kathy Caton condemned the government’s “crippling” move to proceed with the hike, which did not support "brand Britain".
She said: “This is incredibly unfair on consumers who should not be facing higher prices for their favourite products, especially while the cost of living and inflation crises put ever-increasing pressure on household budgets.”
Watch: Wine and whisky producers feel sour over alcohol duty increase
Download the Yahoo Finance app, available for Apple and Android.
