Britons are being alerted to an increase in prices for their preferred alcoholic beverages starting today due to a new tax hike implemented right after the conclusion of Dry January.
Alcohol duty has surged by 3.66%, in alignment with RPI inflation. This uptick translates to 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, according to the Wine and Spirit Trade Association (WSTA).
The decision to raise duty was finalized last year during the Autumn Budget. Industry leaders in the wine and spirits sector have emphasized that companies are compelled to raise prices to maintain viability.
In the previous year, consumers faced a 3.6% surge in alcohol duty, resulting in an increase of 54p for wine and 32p for gin per bottle, while draught duty saw a reduction of 1.7%, equivalent to a penny off a pint.
Concurrently, a new taxation system was introduced, with wine now being taxed based on its strength. WSTA noted that the tax on a bottle of 14.5% red wine has escalated by £1.10 since the revised alcohol duty structure was introduced in August 2023.
Alcohol duties are partially determined 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 costs.
Emma McClarkin, the chief executive of the British Beer and Pub Association, expressed concern over the likelihood of additional price hikes due to these changes, which could strain brewers and publicans.
Miles Beale, chief executive of the WSTA, highlighted the added complexities and challenges in adjusting prices, especially for wine now taxed based on strength, leading to more administrative hurdles for businesses.
A Treasury spokesman emphasized the significance of alcohol duty in maintaining robust public finances to support essential public services.
According to data provided by WSTA, the following figures illustrate the prices before and after the increase in alcohol duty for various drinks starting today.