Britons have been informed that the cost of their preferred alcoholic beverages will rise starting today due to a new tax increase following the conclusion of Dry January. Alcohol duty has gone up by 3.66%, in line with RPI inflation, resulting in additional charges of 11p on a bottle of Prosecco with 11% ABV, 14p on a bottle of red wine with 14.5% ABV, and 38p on a bottle of gin with 37.5% ABV, as reported by the Wine and Spirit Trade Association (WSTA).
This adjustment was confirmed last year during the Autumn Budget. Leaders in the wine and spirits industry have cautioned that companies “have no choice but to increase prices” in order to sustain their operations. In the previous year, consumers saw a 3.6% increase in alcohol duty, adding 54p to a bottle of wine and 32p to a bottle of gin, while draught duty decreased by 1.7%, equivalent to a penny off a pint.
Simultaneously, a new taxation system was introduced where wine is now taxed based on its strength. WSTA highlighted that the tax on a bottle of 14.5% red wine has risen by £1.10 since the recent alcohol duty regime was implemented in August 2023.
Alcohol duties are somewhat tied to 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 cut expenses.
Consumer rights expert Martyn James expressed his dismay, stating, “Is there a more ironic situation than alcohol duty rising right as Dry January concludes? For those of us trying to moderate our alcohol consumption, this feels like a setback. Shouldn’t we be able to enjoy a celebratory drink without added costs? The government’s decision has truly dampened the mood.”
Emma McClarkin, the chief executive of the British Beer and Pub Association, mentioned that these changes increase the likelihood of further price hikes, which brewers and publicans wish to avoid imposing on their customers. Miles Beale, the chief executive of WSTA, emphasized the complexities of price adjustments, especially for wine, which is now taxed based on strength, leading to more administrative challenges ahead.
A Treasury spokesperson defended the tax increase, stating, “Alcohol duty plays a crucial role in maintaining fair and strong public finances, funding the everyday public services that people rely on.”
The WSTA provided the figures below, illustrating the prices before and after the alcohol duty increase for various drinks.