John Healey is expected to increase alcohol duty in line with inflation at the Budget which could add costs for drinkers and put further pressure on pubs and hospitality businesses. The Chancellor is expected to push ahead with the increase in alcohol duty in tomorrow’s Budget. He is expected to increase the tax in line with Retail Prices Index (RPI) inflation which is currently running at 3.9%. If implemented, the change would increase duty on a pint of beer from 50p to 52p.
The duty on a bottle of wine is also expected to rise by between 10p and 12p depending on its strength. A bottle of gin with an alcohol content of 37.5% could see duty increase by 35p.
Drinks industry representatives, however, have urged the Government to freeze alcohol duty warning that further increases could deepen the financial difficulties facing businesses and consumers.
Miles Beale, the chief executive of the Wine and Spirit Trade Association, urged the Chancellor to “support not squeeze” the drinks sector.
He said: “The Chancellor cannot control global fuel prices, but he can put the brakes on relentless and punishing alcohol tax increases, which have consistently failed to raise revenue. He needs to change the record – because it’s broken.
“Labour should not be continuing a failing tax regime that was designed and started by a Conservative government. Wine and spirit producers and retailers across the country are struggling to absorb the hefty duty increases and consumers can’t afford them. Another tax rise will simply mean that more businesses will fold.
“The WSTA continues to call for Government to recognise the immense pressure consumers, businesses, pubs and restaurants are under and put a stop to the tax raids.”
Emma McClarkin OBE, chief executive of the British Beer and Pub Association also said last month: “At a time when young people are finding it really tough to find work, supporting the beer and pub sector would mean Government are helping us create much-needed jobs.
“Increasing the draught discount and freezing beer duty at its current rate would be an undisputed win-win, meaning more affordable pints, greater investment and more jobs.
“Our brewers are forced to pay some of the highest rates of beer duty in Europe, twelve times more than Germany and Spain. Freezing the tax at its current rate, rather than the current planned increase, will start to bring our brewers closer in line with our European counterparts.
“Ahead of the Budget, the Government has a real opportunity here to back Britain’s brewers, pubs and jobs by building on their support for the sector with a freeze on beer duty and a 30% draught discount.”
According to the BBPA, beer duty accounts for up to 40% of the wholesale price of beer, with British brewers paying some of the highest rates in Europe.
A Treasury spokesperon told The Telegraph: “As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”
