Autumn Budget 2018

Beer, cider and spirit tax frozen, but wine duty to rise

By Nikkie Sutton

- Last updated on GMT

Financial boost: Chancellor Philip Hammond hailed the 'great British pub' in his Budget statement (Image: Secretary of Defense, Flickr)
Financial boost: Chancellor Philip Hammond hailed the 'great British pub' in his Budget statement (Image: Secretary of Defense, Flickr)
Duty on beer, cider and spirits has been frozen by Chancellor of the Exchequer Philip Hammond in his 2018 Autumn Budget in Parliament today (29 October).

However, Hammond said that wine duty would rise in line with inflation, meaning the price of a bottle of sparkling wine will increase by 9p an still variants by 7p, and ‘white ciders’ would also be taxed at a higher rate.

Announcing the freeze on beer, cider and spirits, Hammond said: “I have received numerous representations from my honourable and right honourable friends on one particular subject and in response I will be freezing beer and cider duty for the next year, keeping the cost of beer down for patrons of the great British pub.

“And in response to the conservative lobbying of my Scottish colleagues I will also freeze duty on spirits so that we can all afford to raise a wee dram to my colleague Ruth Davidson on the arrival of baby Finn.

“[This will mean, there will be a] saving [of] 2p on a pint of beer, 1p on a pint of cider and 30p on a bottle of Scotch or gin compared to the inflation assumption in the Office for Budget Responsibility (OBR) forecast, while proceeding with the usual OBR increases on wine.

“As promised at the Autumn Budget 2017, so-called white ciders will be taxed at a new higher rate.”

Good news

The Society of Independent Brewers chief executive Mike Benner said the Chancellor would be toasted with a pint of "British independently-brewed beer".

Benner added: “A freeze in beer duty is good news for UK brewers, publicans and beer drinkers. A planned rise in line with inflation would have meant a £100m hit to Britain’s brewers."

Wine & Spirit Trade Association chief executive Miles Beale hailed the freeze on spirits, but criticised the Chancellor’s decision on wine.

He said: “We welcome the Government’s decision to freeze duty on spirits, which will support this great British sector to invest, grow and create jobs – as well as supporting the public finances through increased revenue.

“However, the decision by the Chancellor to increase wine rates significantly is a hammer blow to this great British industry.

“It actively undermines a sector that has been hardest hit since the Brexit referendum and will be thoroughly unwelcome for the 33m consumers of the nation’s most popular alcoholic drink."

Grossly unfair

He added: “This inflationary rise is grossly unfair, unjustified and counter-productive. The UK is the world’s biggest wine trading nation and, as such, deserves Government support not punishment.

“The wine industry is unfortunately, no stranger to harsh treatment from Chancellors. Since 2012, wine overtook beer as the largest contributor to the public purse through duty payments, and no alcoholic drink has paid more to the Treasury since then."

“Today’s announcement means that only twice since 2003 Chancellors from either party have showed their support to an industry employing some 190,000 people across the country.

“By increasing the UK’s already excessive duty rates, the Chancellor will clobber wine importing businesses, including thousands of small and medium-sized enterprises, stifle growth of our flourishing English wine industry, and raise prices for consumers.”

The beer, cider and spirit duty freeze was welcomed by UKHospitality (UKH), which called on the Government to follow up with continued dialogue and backing for hospitality businesses.

Chief executive Kate Nicholls said: "A freeze in the rate of beer, cider and spirits duty, something we have continually called for, will also help avoid an additional squeeze on the hospitality sector."

British Beer & Pub Association chief executive Brigid Simmonds also hailed the Chancellor's announcement about freezing beer, cider and spirits duty.

She added: "This is a big step in the right direction and a huge help for pubs across the UK that are struggling. I hope we can continue to build on this success in the future and we will continue to celebrate the vital role that local pubs play in communities and highlight the ongoing pressures they face by supporting the Long Live the Local campaign."

Related topics: Beer

Related news

Show more

Follow us

Pub Trade Guides

View more

FREE EMAIL NEWSLETTER

Subscribe to The Morning Advertiser

The definitive voice for the pub trade

Get the latest news, analysis and insights from the uk pub sector straight to your inbox!

Listen to The MA Podcast