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Budget 2021: Here’s What Rishi Sunak’s Overhaul Of Alcohol Duty Means For Drinkers

  • October 27, 2021

Red wine producers and drinkers are a significant loser as the changes have a detrimental effect on wines with strong alcohol levels.

The duty change will result in a bottle of £7 Hardy’s VR merlot facing an increase of around 5%, with a tax hike of 35p.

A 75cl bottle of Campo Viejo Rioja Gran Reserva will see a tax rise of roughly 47p, the Treasury said.

The changes will also have a heavy impact on the price of popular fortified wines.

Port and madeira will be particularly hard hit, with typical bottles of 20% strength port likely to see increases of over £1 in their tax.

Sherry could also become more expensive, with documents showing that Croft sherry would see a 51p rise in duty.

Scottish favourite Buckfast, which is roughly 8.5%, will face an 81p tax increase on an £8.50 bottle.

The retail prices of some spirits such as vodka and whisky will be broadly unchanged.

However, one of the biggest losers of the changes will be the drinkers and manufacturers of strong “white cider” drinks.

Budget documents showed that a 2.5-litre bottle of Frosty Jack’s, at around 7.5% ABV, will increase by 45p from £3.70, representing a roughly 12% increase.

Rival brand Ace will also be faced with an increase of roughly 45p per bottle, officials said, as stronger, cheaper drinks were hit hardest.

What did the industry say?

Pubs in Britain have faced some of the strictest restrictions of any industry during the pandemic, including months of mandatory closures, curfews, and a requirement that drinkers only be served if they have ordered a substantial meal.

Miles Beale, chief executive of the Wine Spirit Trade Association, said: “The decision to freeze wine and spirit duty comes as a huge relief to British businesses, the hospitality sector – including its supply chain – and consumers, giving everyone a much-needed break to help them recover from the pandemic.

“Chancellor Rishi Sunak should be commended for listening to our calls for support and understanding that punishing tax hikes are not the best way to reinvigorate the sector.

“By offering continued respite to the UK wine and spirit sector his actions will help save jobs and – in time – replenish revenues to the Treasury through growth in our potential-filled sector.”

Emma McClarkin, chief executive of the British Beer Pub Association, said: “Pubs, brewers and beer drinkers will be toasting the Chancellor today for a range of business-boosting measures.

“Pub goers will also be toasting the Chancellor today for announcing a 5% lower duty rate on draught beer worth £62 million.

“This is great news for our local pubs and recognises the crucial role they play in our economy and society.

“However, the overall beer duty rate in the UK remains amongst the highest in Europe.

“It is vital for Britain’s brewers, a world class homegrown manufacturing success story, that the overall beer duty burden is reduced – not just duty on draught beer in pubs.”

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