Britons are facing higher prices for their preferred alcoholic beverages starting today due to an increase in alcohol duty following the conclusion of Dry January. The new tax hike, aligned with RPI inflation, will result in additional costs for consumers. For instance, a bottle of Prosecco with 11% ABV will see an 11p increase, red wine with 14.5% ABV will rise by 14p, and gin with 37.5% ABV will go up by 38p, as reported by the Wine and Spirit Trade Association (WSTA).
This rise was confirmed in the previous year during the Autumn Budget, prompting warnings from wine and spirits industry leaders that price hikes are necessary for businesses to remain viable. Last year, drinkers faced a 3.6% increase in alcohol duty, with a 54p rise for wine and a 32p increase for gin, while draught duty saw a 1.7% reduction, equivalent to a penny off a pint.
Moreover, a revised taxation system now factors in the strength of wine, with a £1.10 rise on a 14.5% red wine bottle since the recent alcohol duty system came into effect in August 2023. Alcohol duties are influenced by beverage strength, leading some beer brands to lower their alcohol content to reduce costs.
Consumer rights expert Martyn James expressed disappointment in the timing of the duty increase coinciding with the end of Dry January, stating that it undermines efforts to moderate alcohol intake. Industry representatives, including Emma McClarkin of the British Beer and Pub Association and Miles Beale of the WSTA, highlighted the potential for further price hikes due to the increased tax burdens on businesses.
The Treasury defended the alcohol duty rise, emphasizing its role in maintaining public finances and supporting essential services. The new pricing structure, affected by the duty increase, has been outlined by the WSTA, reflecting the impact on consumer expenses.