Bottles of wine to become more expensive from this summer
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Bad news, rosé fans. Bottles of wine are set to become more expensive from this summer, as part of the government’s tax hikes on alcohol.
In today's Budget, Hunt confirmed that while duty on draught beer in pubs would be 11p lower than duty in supermarkets, the current freeze on alcohol duty would end on 1 August as expected, meaning it will then rise with inflation.
He said: "In December, I extended the alcohol duty freeze until August 1, after which duties will go up in line with inflation in the usual way.
“But today, I will do something that was not possible when we were in the EU and significantly increase the generosity of Draught Relief so that from August 1 the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee."
Unfortunately, that's not the only change that will hit wine lovers.
The government is also set to change the way alcohol duty is calculated from August.
Stronger drinks will be taxed more than weaker equivalents, and duty on wine will now be charged at £24.77 per litre for wine between 3.5% and 8.5% ABV and £28.50 per litre for wines between 8.5% and 22% ABV.
Analysis from the Wine and Spirits Trade Association (WTSA) found that this would mean a nine percent duty rise across 90 percent of still wines.
The trade association estimated that these two policies mean bottles of wine will rise in price by up to 20 percent - the equivalent of 44p - based on the Treasury using a 10 percent inflation figure.
The WTSA also estimated that fortified wine would be especially hit by the double increase, with port set to rise by £1.29 a bottle and sherry by 97p a bottle.
In turn, the changes would mark the single biggest increase in wine since such rates were set nearly five decades ago.
WTSA chief executive Miles Beale said: “The UK’s 33 million wine drinkers are blissfully unaware that the price of wine is set to rocket this summer.
“If the Chancellor goes ahead with a two-pronged attack on wine drinkers by adding an inflationary duty increase on top of the stealth tax already applied when the Government’s new alcohol duty regime kicks in this summer, duty alone will add 44p to a bottle of still wine.
“If alcohol duty rates went up by RPI, this will be a crippling blow to the UK alcohol industry and consumers who will have to pay the price for tax rises during a cost-of-living crisis."
Emma McClarkin, chief executive of the British Beer and Pub Association, also warned that beer drinkers will likely see prices rise come August too.
She said: "The cut to draught duty as part of the alcohol duty reform is positive and we hope that it will result in a boost for our pubs this summer.
"However, the fact is our industry will be facing an overall tax hike, not a reduction, come August.
"Duty on non-draught beer will rise and the measures introduced today won’t rebalance the catastrophic impact soaring inflation and unfair energy contracts are having on both pubs and the breweries that supply them."