Britons are facing higher costs for their preferred alcoholic beverages starting today due to an increase in alcohol duty following the conclusion of Dry January. The rise in alcohol duty by 3.66%, aligned with RPI inflation, will result in an additional 11p for a bottle of Prosecco with 11% alcohol by volume, 14p for a bottle of red wine with 14.5% ABV, and 38p for a bottle of gin with 37.5% ABV, according to the Wine and Spirit Trade Association (WSTA).
The decision to raise alcohol duty was finalized last year during the Autumn Budget. Industry leaders in the wine and spirits sector have emphasized that price hikes are inevitable for businesses to remain sustainable.
In the previous year, consumers experienced a 3.6% increase in alcohol duty, leading to an additional 54p for a bottle of wine and 32p for gin, while draught duty saw a reduction of 1.7%, equivalent to a penny off a pint.
Additionally, a new taxation system based on the strength of wine was introduced, resulting in a £1.10 increase per bottle of 14.5% red wine since the recent alcohol duty changes in August 2023.
Alcohol duties are influenced by the alcohol content of beverages. Several beer brands have adjusted their alcohol content to manage costs, including Foster’s, Carlsberg, Coors Light, and Sol.
Emma McClarkin, chief executive of the British Beer and Pub Association, expressed concerns about potential price increases due to the recent duty changes, affecting both brewers and customers. Miles Beale from WSTA highlighted the complexities in pricing adjustments, particularly for wine, and emphasized the necessity for price hikes to navigate various cost pressures faced by businesses.
A Treasury spokesperson defended the role of alcohol duty in maintaining public finances and supporting essential public services.
The WSTA provided figures showing the prices of drinks before and after the alcohol duty increase, reflecting the impact on consumers.