Chancellor Jeremy Hunt unveiled the plan to freeze alcohol duty until August next year.
In the Autumn Statement in the House of Commons, Hunt said: “For many people, going to the pub has become more expensive. As well as confirming our Brexit pubs guarantee, which means the duty on a pint is always lower than in the shops, I have decided to freeze all alcohol duty until 1 August next year. That means no increase in duty on beer, cider, wine, or spirits.”
The Treasury claims that the freeze will take 3p off the duty cost of an average pint of beer. The policy change comes after 1 August saw the largest duty increase in almost 50 years.
As per British media reports, increased duty has resulted in a 20% decline in spirit sales and a double-digit drop in wine.
WSTA chief executive Miles Beale said: “The alcohol duty freeze comes as a huge relief to wine and spirit businesses and the hospitality sector who have taken a battering over the last few years. 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.”
“We implore the Chancellor and his team to lock in the freeze until at least the end of this Parliament. This will keep people in jobs and mean consumers will still be able to enjoy a drink at a price they can afford.”
Average price of a bottle of scotch
While the freeze has been welcomed by the industry, duty will remain at the August level of £31.64 per litre of pure alcohol, the Scotch Whisky Association reports that of the £15.63 average price of a bottle of scotch, £11.40 is collected in taxation through duty and vat - a tax burden of 73%.
Scotch Whisky Association chief executive Mark Kent said: “The industry is raising a dram to the Chancellor’s decision to support scotch whisky producers by returning to the duty freezes that have supported the industry, incentivised investment, and boosted Treasury revenue. With cost pressures hurting distillers large and small, the Treasury has provided some much-needed certainty and stability for the year ahead that will allow us get back to doing what we do best – making a world-class spirit, with a global reputation, which creates jobs and boosts growth here at home.
“Under the current duty system, scotch whisky is still put at a disadvantage, based on a fundamental misunderstanding of how people consume alcohol and modern drinking trends. 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.”
