Britons are being alerted to an increase in the cost of their preferred alcoholic beverages starting today due to a new tax hike following the conclusion of Dry January.
Alcohol duty has gone up by 3.66%, aligning with RPI inflation. This will result in an additional 11p on a bottle of Prosecco with 11% alcohol by volume (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 in the Autumn Budget last year. Industry leaders in the wine and spirits sector have cautioned that businesses “have no choice but to increase prices” to remain viable.
In the previous year, consumers faced a 3.6% rise in alcohol duty, leading to a 54p increase in the price of wine and a 32p rise for gin, while draught duty saw a reduction of 1.7%, equivalent to a penny off a pint.
Simultaneously, a new taxation system was introduced where wine is taxed based on its strength. WSTA highlighted that the tax on a bottle of 14.5% red wine has surged by £1.10 since the recent alcohol duty structure was implemented in August 2023.
Alcohol duties are 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 cut expenses.
Emma McClarkin, chief executive of the British Beer and Pub Association, expressed concerns over potential price hikes, emphasizing the strain this move puts on brewers and publicans.
Miles Beale, chief executive of the WSTA, pointed out the complexities arising from price changes, especially for wine now taxed according to strength, leading to more administrative challenges for businesses.
A Treasury spokesperson underscored the importance of alcohol duty in maintaining fair public finances to support essential public services.
The figures provided by WSTA show the prices prior to the alcohol duty increase and the revised costs of these drinks effective today.