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Spring Budget: duty rises for beer, cider, wine and spirits

By Liam Coleman , 08-Mar-2017
Last updated on 09-Mar-2017 at 12:30 GMT2017-03-09T12:30:55Z

All rise: Alcohol duty will be going up across the board from 13 March
All rise: Alcohol duty will be going up across the board from 13 March

Alcohol duty will rise for beer, cider, wine and spirits, the chancellor has announced in the budget.

This is in contrast to previous Budgets , which have seen a freeze or cut in beer duty. In his speech today, Philip Hammond announced that he will “make no change to previously planned upratings of duties on alcohol”. That means that beer, cider, wine and spirit duty will all rise in line with inflation.

The British Beer & Pub Association (BBPA) said that this would put an extra 2p on every pint of beer. “[It] is not good news for the British beer industry and in turn pubs,” said the association’s chief executive Brigid Simmonds.

She added: “Beer tax has now risen by 43% [over] the past 10 years. This latest rise will mean 4,000 fewer jobs this year, mostly in pubs. Tax rises on all alcohol will add £125m to the cost base of pubs.”

Bruce Ray, Carlsberg’s corporate affairs director, said that the rise was “disappointing news for all of us involved in brewing and selling beer, and particularly those people who enjoy a glass of beer in the pub”.

“Last year’s freeze on beer tax supported investment in growth and innovation in pubs and breweries – demonstrating the crucial social and economic contribution that our industry makes to the UK. This increase simply risks undoing that good work,” he added.

Likewsie, the National Association of cider Makers called the rise "dissapointing".

Fenella Tyler, chief executive of the NACM, said: "It is disappointing that despite the challenging conditions facing cider makers in the UK, the Chancellor has been unable to respond to the cider industry’s concerns and has increased cider duty rates in line with inflation. The cider market is facing some difficult challenges and a 3.9% increase in excise duty will inevitably impact on our efforts to return cider to growth."

A return to the escalator

CAMRA national chairman Colin Valentine likened the hike to the much-maligned beer duty escalator which operated between 2008 and 2013.

“The announced 2p-a-pint increase marks a return to the days when the beer duty escalator contributed to 75,000 job losses, 3,700 pub closures and a 24% fall in beer sales in pubs.

“The rise in beer duty will ultimately hit consumers in their pockets and lead to pub closures across the country,” he said.

‘A tough trading landscape’

Wine and spirits have been hit just as badly as beer by the Chancellor’s announcement. The Wine & Spirit Trade Association (WSTA) estimated that duty on a 750ml bottle of wine will increase by 8p, while duty on a 70cl bottle of vodka will increase by 28p.

The country’s thriving gin market is also likely to be hit with a duty of 30p on a 70cl bottle of gin, meaning that duty now accounts for £8.05 on a bottle of gin.

Miles Beale, chief executive at the WSTA, said: “It is disappointing that the Chancellor has failed to support a great British industry. He has increased what were already excessive and unfairly high rates of duty for the UK’s wine and spirit consumers and businesses.

“Between Brexit’s impact on the pound and rising inflation, the wine and spirit businesses face a tough trading landscape. This is a missed opportunity to back British business and help out struggling consumers.

“At least there is some sign that Philip Hammond cares about levelling the playing field. It is important that he treated all alcohol products equally.”

Spirits giant Diageo voiced similar disapproval of the rise.

"Today’s tax blow from the Chancellor is bad for the economy, bad for business and bad for the British public. It is staggering that the Prime Minister stood up in Scotland only on Friday and said that Scotch Whisky is 'a truly great Scottish and British industry… and directly supports tens of thousands of jobs', and just five days later her Chancellor hammers this industry at home," Charles ireland, the managing director for Diageo GB said.

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