MPs and campaigners voice anger over 10.1% spirits hike

17-Jul-2023 - Last updated on 17-Jul-2023 at 12:23 GMT

Anger voiced: the largest spirits tax hike since 1981 when Margaret Thatcher was PM will come into play on 1 August

Related tags Spirits Social responsibility Gin Government Finance

Cross-party MPs and campaigners have descended on Westminster to voice their anger over a tax hike that will push the price of some drinks at pubs up by 10.1%.

The group claimed data from the UK Spirits Alliance (UKSA) shows the move to push up spirits prices in the on-trade from 1 August will leave the “majority of small, independent distillers fearing closure”.

Chancellor Jeremy Hunt announced the increase in his Budget earlier this year, which is set to come in to operation in two weeks’ time.

The campaigners, which also included pub operators, said a third of drinks served at the pub are spirits meaning pubs will be “in the lurch as the economy stutters to a halt amid the ongoing cost-of-living crisis” and added the move comes despite the Conservative Government manifesto pledged to “ensure that our tax system is supporting British drink producers”.

A spokesperson for the UKSA said: “This tax hike is not just shortsighted, it is actively damaging to pubs, distilleries and the hospitality sector.”

Highest hike since Thatcher was PM

They continued: “With the 10.1% hike in spirits duty – the highest since 1981 – the chancellor has failed to reflect the popularity of the diverse modern hospitality industry, driven by the growth in innovative British products such as those created by the small distillers within our membership.

“The chancellor should be doing everything he can to support the British drinks industry, not hiking taxes on consumers and holding back growth.”

Labour party MP Charlotte Nichols and Conservative Sarah Atherton came together across party lines to say: “With duty hikes, on top of everything else happening to businesses right now, gin makers tell us just how worried they are about the future.

“That’s why we’re calling on politicians across all parties to join us at this difficult time for the industry in backing British spirits makers.”

Nichols, who represents Warrington, which is the source of a fifth of the world’s gin added: “Are we really surprised to see this Government breaking its promise to gin makers and pub owners? Never again can the Conservatives say they’re the party of business.”

Hammer pubs, distillers and consumers

Meanwhile, a spokesperson for distillery Wessex Gin in chancellor Jeremy Hunt’s Surrey constituency said: “Providing relief on draught beer and cider while hiking tax on home-grown spirits that make up a massive chunk of pub sales will hammer pubs, distillers and consumers alike.

“Research increasingly shows that consumers prefer premium products like British gin. The chancellor needs to think again.”

Jay Byers, who owns gin producer Steel River Drinks in Stockton-on-Tees, explained: “This hike on spirits duty is going to come as a bombshell for the whole industry.

“We are already managing shocking energy bills, record inflation and rocketing interest rates, and a fresh hike on duty is the last thing distillers and our hospitality industry needs.

“The gin boom of the past decade has been a gift for the Treasury, but this tax rise puts all that at serious risk.

“All of this growth has been put on the line by the chancellor with businesses and consumers picking up the tab at a time when they can least afford it. Sadly, there may be no coming back for hospitality in many areas of the UK now.”