Spring Budget 2021

Chancellor extends beer, cider, wine and spirits duty freeze

By Stuart Stone contact

- Last updated on GMT

Duty freeze: Chancellor of the Exchequer Rishi Sunak has announced that planned duty increases on beer, cider, wine and spirits have been cancelled for a second year in a row
Duty freeze: Chancellor of the Exchequer Rishi Sunak has announced that planned duty increases on beer, cider, wine and spirits have been cancelled for a second year in a row

Related tags: Beer, Cider, Spirits, Legislation, Finance

Chancellor of the Exchequer Rishi Sunak has announced that planned duty increases on alcoholic drinks have been cancelled.

Announcing his latest Spring Budget in a bid to tackle UK biggest economic crisis since the Great Frost of 1709, Rishi Sunak revealed a freeze on beer, cider, wine and spirits duty for another 12 months.

In the days prior to his latest Budget speech, Sunak had stated that alcohol duty would be addressed and referenced his cancellation of planned increases to beer, cider, wine and spirit duty in last year’s Spring Budget.

Responding to Sunak's Budget, the chief executive of the Wine & Spirit Trade Association, Miles Beale, said that the decision to freeze duty came as a "huge relief" for British following the "crushing – and continuing - closure of the hospitality sector".

"Chancellor Rishi Sunak seems to 'get it'," Beale said. "He understands that supporting our industry will allow it to recover, rebuild, create jobs and - in time – replenish revenues to the Treasury. 

"He has also shown he is in touch with men and women from all walks of life who want to enjoy their chosen tipple without getting stung by further tax hikes.

"We will all raise a glass to the Chancellor tonight – and look forward to more permanent support for the sector following the review of alcohol taxation.”

‘Dire situation’

The announcement comes after a group of 68 Conservative MPs urged the Chancellor to slash beer duty in his Budget in a bid to encourage drinkers back to their local pubs.

What’s more, model and pub operator Jodie Kidd​ joined calls for a Beer Duty cut in February when the operator of the Half Moon pub in Kirdford, West Sussex stated: “The Government must act to help save pubs from the dire situation they face now.”

According to recent research, UK pubs foot an annual bill pf £3.6bn in beer duty​, higher than their counterparts in Germany, Spain, Italy, the Netherlands and Ireland combined.

Sunak maintained that while the Government has pledged £280bn of support in its “unprecedented” response to the Covid-19 pandemic thus far – “one of most comprehensive and generous in the world” – he would endeavour to do “whatever it takes” to bolster the economy, which the Office for Budget Responsibility estimates will return to pre-Covid levels by middle of next year.

“This Budget meets the moment with a three-part plan to protect the jobs and livelihoods of the British people,” he said.

The UK recently avoided a double dip recession​​ after registering 1% growth in the final quarter of the year, 2020 saw the biggest annual drop in GDP (9.9%) since the Great Frost of 1709 when the economy shrank by 13%. 

This saw food and beverage service output from venues such as pubs almost halved (48%) while alcoholic drink manufacturing fell by a third (33.9%) according to the Office for National Statistics (ONS).

Related topics: Beer

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