Britons have been cautioned that the cost of their preferred alcoholic beverages will increase starting today due to a new tax hike following the conclusion of Dry January.
Alcohol duty has surged by 3.66%, aligning with RPI inflation. This adjustment will result in an additional 11p for a bottle of Prosecco with an 11% alcohol by volume (ABV), 14p for a bottle of red wine with 14.5% ABV, and 38p for a bottle of gin with 37.5% ABV, as reported by the Wine and Spirit Trade Association (WSTA).
The decision to raise the duty was finalized last year during the Autumn Budget. Leaders in the wine and spirits industry have indicated that price hikes are inevitable for businesses to maintain viability.
In the previous year, consumers faced a 3.6% increase in alcohol duty, adding 54p to a bottle of wine and 32p to gin, while draught duty saw a reduction of 1.7%, equivalent to a penny off a pint.
Simultaneously, a new taxation system was implemented, where wine is taxed based on its strength. WSTA highlighted that the tax on a bottle of 14.5% red wine has escalated by £1.10 since the introduction of the recent alcohol duty structure in August 2023.
Alcohol duties are partly influenced by the potency of beverages. Several beer brands, such as Foster’s, Carlsberg, Coors Light, and Sol, have lowered their alcohol content in recent months to mitigate expenses.
Emma McClarkin, the chief executive of the British Beer and Pub Association, expressed concerns about potential price increases due to the recent changes, which could strain profit margins for brewers and publicans.
Miles Beale, chief executive of WSTA, emphasized that the pricing complexities, particularly for wine now taxed by strength, will create additional challenges for the wine and spirit industry.
A spokesperson for the Treasury defended the alcohol duty increase, stating its importance in maintaining robust public finances to support essential services.
The figures provided by WSTA show the prices before and after the alcohol duty rise for various drinks, reflecting the impact on consumer costs.