Britons are facing higher prices for their preferred alcoholic beverages starting today due to a new tax increase, coinciding with the conclusion of Dry January. Alcohol duty has gone up by 3.66%, aligning with RPI inflation. This adjustment will result in an additional 11p for a bottle of Prosecco with 11% alcohol by volume (ABV), 14p for a bottle of red wine with 14.5% ABV, and 38p for a bottle of gin with 37.5% ABV, as reported by the Wine and Spirit Trade Association (WSTA).
The decision to raise the duty was made last year during the Autumn Budget. Industry leaders in the wine and spirits sector have expressed that price hikes are inevitable for businesses to remain viable. In the previous year, consumers faced a 3.6% increase in alcohol duty, adding 54p to a bottle of wine and 32p to a bottle of gin, while draught duty saw a reduction of 1.7%, equivalent to a penny off a pint.
Additionally, a new taxation system has been implemented where wine is taxed based on its strength. WSTA noted that the tax on a bottle of 14.5% red wine has surged by £1.10 since the recent alcohol duty framework was introduced in August 2023. Alcohol duties are influenced by the potency of beverages, leading some beer brands to decrease their alcohol content to mitigate expenses.
Emma McClarkin, the chief executive of the British Beer and Pub Association, expressed concern over the likelihood of further price increases that could strain brewers and publicans. Miles Beale, chief executive of WSTA, highlighted the complexity of pricing changes, especially with wine now being taxed based on strength, adding to the burden on businesses already facing various expenses.
A Treasury spokesperson emphasized the importance of alcohol duty in maintaining robust public finances that support essential services. The following figures provided by WSTA illustrate the prices prior to the alcohol duty hike and the revised costs effective today.