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Rishi Sunak Heckled at Beer Festival Over Plans to Hike Alcohol Duty

Strategic Insights

— 2 min read

Rishi Sunak's attempts to promote a new alcohol duty regime at a London beer festival were met with heckling from a pub owner, who pointed out the irony of raising taxes on the day the Premier was pouring a pint. Sunak's plans, which aim to simplify alcohol duties by taxing drinks based on their strength, have been met with criticism from whisky distillers and brewers, who argue they will face a significant tax hike. The new regime, which was first introduced by Sunak when he was Chancellor in 2021, will see duty rise on a range of drinks, including wine, vodka, and canned beer, with consumers facing an extra 53p on a bottle of wine.

Key Takeaways:

  • The new alcohol duty regime, which comes into effect on August 1, will hike tax on a range of drinks, including wine, vodka, and canned beer, with consumers facing an extra 53p on a bottle of wine.
  • Whisky distillers and brewers argue the changes will be a "hammer blow" and a "tax hike" respectively, with duty on a bottle of port going up by over £1.50.
  • The British Beer and Pub Association (BBPA) says the tax increase on packaged beer will add an extra £225 million of costs per year across the industry, with tax making up around 30% of the cost of a 500ml bottle.
  • The Treasury claims that over 38,000 UK pubs will benefit from tax relief that effectively freezes or cuts the alcohol duty on beer poured from tap from August 1.
  • Scottish Whisky Association director of strategy Graeme Littlejohn argues the 10.1% duty increase is a "hammer blow" for distillers and consumers, with the average priced bottle of Scotch whisky increasing in tax burden to 75% due to the increase.

Statistics:

  • 53p increase in tax on a bottle of wine, combined with VAT.
  • 90p increase in tax on a bottle of gin or vodka.
  • 44p increase in tax on a bottle of 18% cream sherry, with VAT adding up to an increase of more than £1.
  • 38,000 UK pubs to benefit from tax relief that effectively freezes or cuts the alcohol duty on beer poured from tap from August 1.
  • Tax to make up around 30% of the cost of a 500ml bottle of beer.
  • £225 million of additional costs per year across the industry for brewers due to the tax increase.

Sources:

  • Bloomberg
  • Wine and Spirit Trade Association (WSTA)
  • British Beer and Pub Association (BBPA)
  • The Treasury
  • Scottish Whisky Association

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