UK Alcohol Duty Freeze Brings Relief for the Alcohol Industry

UK Alcohol Duty Freeze Brings Relief for the Alcohol Industry

In the latest Autumn Statement from the UK government, the wine and spirits industry is breathing a sigh of relief as the Chancellor brings back a freeze to alcohol duty. This move comes as a welcome reprieve for a sector that has faced considerable challenges in recent times.

The "Brexit Pubs Guarantee" and Extended Duty Freeze

Alongside the welcomed freeze, the Chancellor has confirmed the implementation of the "Brexit Pubs Guarantee." This guarantee ensures that duty on a pint remains consistently lower than in retail outlets. Furthermore, all alcohol duty will remain frozen until August 1 2024, providing a crucial lifeline for businesses.

Industry Challenges and the Need for Stability

The Wine and Spirit Trade Association (WSTA) sheds light on the hurdles faced by British businesses, anticipating a potential second duty increase. This foresight comes on the heels of the Government's new alcohol duty regime introduced on August 1 2023, marking the most significant alcohol tax rise in nearly half a century.

Freezing Duties Amidst Economic Turbulence

The decision to freeze excise duty is particularly timely, considering the near triple-digit increase in inflation witnessed by the wine and spirits sector in the last three months. With supply chain costs skyrocketing and glass recycling fees reaching astronomical heights, the freeze provides a crucial stabilising factor.

WSTA's Perspective and Industry Advocacy

Miles Beale, Wine and Spirit Trade Association (WSTA) Chief Executive, had this to say: “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.

“Following the introduction of an entirely new alcohol tax regime and huge hike in August, the latest data shows a worrying decline in sales, which concerns businesses of all sizes and which would result in less revenue for the Exchequer.

“A second duty rise would have been disastrous.

“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.

“These are ongoing concerns about the impact of the new regime, which need to be kept under review. 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.”

The UK Spirits Alliance also welcomed the freeze with distiller Stephen Russell commenting: “We raise a toast to the Chancellor today for his decision to freeze duty and thank him for listening to thousands of distillers, landlords and bar owners up and down the UK.

“He has raised the spirits of the sector, and his decision today is a vote of confidence in this vibrant homegrown sector. Today’s freeze will drive growth in the industry, support jobs and help consumers at a time when household budgets continue to be squeezed”.

Looking Ahead

In closing, Beale implores the Chancellor and his team to consider extending the freeze until at least the end of this Parliament. This strategic move aims to support job retention, ease consumer frustrations, and ensure the affordability of alcoholic beverages.

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