Alcohol duty will be frozen until August 1 2024 as announced by chancellor Jeremy Hunt in today’s Autumn Statement.
Speaking from the House of Commons, Hunt announced that, in line with the trade’s request, an alcohol duty freeze has been put in place until next summer.
“I’ve listened closely to the persuasive arguments on alcohol duty,” Hunt said, before confirming the duty freeze.
“I have decided to freeze all alcohol duty until August 1 next year – that means no increase in duty on beer, cider, wine or spirits.”
Hunt also confirmed the government’s ‘Brexit pubs guarantee’, meaning duty on beer will be lower for the on-trade than the off-trade.
The trade has welcomed Hunt’s announcement, Miles Beale, chief executive of the Wine and Spirit Trade Association which has been lobbying for the duty freeze, said the Autumn Statement “comes as a huge relief to wine and spirit businesses”.
“We are extremely relieved that the government – and exchequer secretary, Gareth Davies in particular – has listened to our pleas not to hit wine and spirit businesses and consumers with another painful duty increase.”
Excise duty on alcohol was increased by 10.1% from August 1 2023, while a taxation system based on alcoholic strength was also put in place.
Beale said that a “second duty rise would have been disastrous”, noting a “worrying decline in sales” following the new duty regime put in place earlier this year.
“We are pleased that the frustrations of consumers, who are fed up with never ending price rises, and of businesses struggling with the cost and complexities of the new system have been heeded. These are ongoing concerns about the impact of the new regime, which need to be kept under review.”
Kathy Caton, managing director of Brighton Gin, echoed this, saying August’s duty hike “has had a very clear and damaging effect on sales,” resulting in business closures. “A second duty rise could have seen more distilleries go bust,” she added.
Ed Baker, managing director at Kingsland Drinks, also praised the government’s decision: “We are relieved that the chancellor has decided to not hamstring the UK wine and spirits sector even more by a further excise increase.
“The recent increases are making the UK consumer pay some of the highest alcohol taxes in Europe which are now filtering through to higher pricing for them and lower sales for us; an additional rise would have damaged our industry even further.”
In the beer industry, Emma McClarkin, chief executive of the British Beer and Pub Association, said the chancellor’s decisions will help to deliver economic growth while also reducing financial pressure on the sector.
“[The chancellor has] recognised the importance of our nation’s pubs and brewers to the economy and communities”.
Chief executive of the Scotch Whisky Association, Mark Kent, said the freeze has “provided some much-needed certainty and stability for the year ahead”.
However, Kent noted that under the current duty system, which taxes drinks depending on abv, spirits including whisky are still “put at a disadvantage, based on a fundamental misunderstanding of how people consume alcohol and modern drinking trends.”
He continued: “We want to continue the discussion with government about how the tax system can more closely reflect the number of units in a typical drink, rather than the strength of the finished product. Despite today’s duty freeze, cider is still taxed four times less than a spirit like Scotch whisky – this is not fair and cannot be justified.”
Looking ahead, the WSTA’s Beale called on the chancellor to “lock in the freeze until at least the end of this Parliament”.
He continued: “This will keep people in jobs and mean consumers will still be able to enjoy a drink at a price they can afford.” As well as lobbying for the duty freeze, the WSTA is currently working with Drinks Retailing to urge the government to retain the temporary tax bracket for wine. Read more about our Crush the Red Tape campaign.