Triple whammy of costs will ‘inevitably result in price rises’

By Nikkie Thatcher contact

- Last updated on GMT

Call to action: UKHospitality urged the Government to extend reforms (image: Getty/alexsl)
Call to action: UKHospitality urged the Government to extend reforms (image: Getty/alexsl)

Related tags: Legislation, ukhospitality, Finance, Tax

Government reforms to the alcohol duty system have been welcomed by one trade body alongside warnings for further changes ahead of a “triple whammy of costs” for the sector.

In its response to a Government consultation, UKHospitality (UKH) has called on the Government to go further and faster in its reforms, particularly for draught beer and cider.

Currently, the reduced rate only applies to products in 40-litre plus containers and UKH is asking this is expanded so containers of 20-litre plus are included.

Positive measure

The response also lays out the case for the relief’s application to be brought forward to this autumn and be set higher than 20%.

Furthermore, UKH is also asking the Government to look at a reduced rate of duty for other products and package types sold through hospitality businesses and for the administrative burden of complying with the excise duty to be further streamlined.

UKH chief executive Kate Nicholls said: “We very much welcome the alcohol duty review. Streamlining the system is a positive measure, underpinned by rational thinking and we particularly applaud the introduction of a reduced rate of duty for draught beer and cider, products sold almost exclusively through hospitality venues.

“In the face of the cost-of-living crisis, it will be important for operators to keep the price of drinks for consumers as low as possible, particularly as operational costs continue to soar and, come this April, the industry will be hit with a triple whammy of increased VAT, business rates and labour costs."

Inevitable price rises

She added: “This will inevitably result in price rises across the sector and prove particularly damaging to pubs, restaurants and hotels that rely heavily on drinks sales.

“As well as this alcohol duty reform to help support the sector, we are also urging the Government to keep the current lower rate of 12.5% VAT for the sector permanently for food, non-alcoholic drinks, entry fees and accommodation.”

This followed warnings pint prices could increase by 50p across the UK while Londoners may have to pay £7 a pint due to rising inflation​.

Related topics: Legislation

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