U-turn on alcohol duty freeze 'huge blow'

By Amelie Maurice-Jones

- Last updated on GMT

Major blow: Chancellor reverses freeze on alcohol duty rates (UK Parliament 2022)
Major blow: Chancellor reverses freeze on alcohol duty rates (UK Parliament 2022)

Related tags Finance Beer Wine Spirits

The planned freeze on alcohol duty increases has been scrapped by the Chancellor this morning (17 October) in what is a “huge blow” for pubs.

The new Chancellor Jeremy Hunt ditched almost all of Prime Minister Liz Truss’s tax cuts announced in the mini-budget three weeks ago.

Among the measures dropped was the halting of the planned increases for duty rates on beer, cider, wine and spirits set out by Kwasi Kwarteng.

He had proposed an 18-month transitional measure for wine duty and said the Government would extend draught relief to cover smaller kegs of 20 litres and above to help smaller breweries.

British Beer and Pub Association Emma McClarkin said this decision to scrap the alcohol duty freeze was a “huge blow”​ to brewers and pubs.

In desperate need

“The freeze would have delivered a £300m saving to our industry at a time when we desperately need any relief we can get, to help to keep a lid on spiralling costs and keep the price of pint affordable for pub goers this winter,” she said.

The cost-of-doing-business is “completely out of control” for pubs and brewers, and Government’s failure to act to reduce pressures on firms will hit them “extremely hard” according to McClarkin.

She continued: “Our sector needs stability to plan and be able to keep serving communities at a reasonable price, but instead has been subject to ongoing uncertainty for too long.

“Waiting until a February budget to ease these pressures will be too late, we need the Chancellor to act before winter really starts to bite for our brewers, pubs and the customers and we lose them forever in communities across the UK.”

Economy crashed

Night Time Industries Association chief executive Michael Kill said: “In less than 40 days in office the Prime Minister has crashed the economy,​ placing an insurmountable level of pressure on businesses and people's livelihoods.

“The Statement from the new Chancellor, may calm the markets, but has critically compromised thousands of businesses and workers across our sector.”

This meant, according to Kill, the sector now faced one of the toughest winters in history.

UKHospitality chief executive Kate Nicholls said one area in dire need of urgent reform is the business rates system, which she believed was currently not fit for purpose as placed an unfair burden on hospitality businesses.

“This is particularly pressing now, given the additional costs hospitality businesses will now be facing as a result of the freeze on alcohol duty being scrapped,” she added.

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