As announced in the Spring Budget earlier this month, the Government are set to increase duty rates on all alcoholic products produced in, or imported into, the UK in line with inflation at 10.1% RPI. These measures will take effect from 1st August 2023. Unsurprisingly, in addition to the cost of living crisis, these changes have been met with opposition and feelings of insult from across the industry, from distillers and producers to consumers.

Broadly speaking, the new alcohol duty regime will tax alcohol according to its strength (ABV). This has been divided into four categories:

  • 1.2 to 3.4% ABV;
  • 3.5 to 8.4% ABV;
  • 8.5 to 22% ABV; and
  • above 22% ABV.

Most wines will fall into this third category. As per the Government’s policy paper on this duty increase, the revised rate for all alcoholic products that are at least 8.5% ABV, but do not exceed 22% ABV, is £28.50 per litre of alcohol in the product. The Wine and Spirit Trade Association (WSTA) have calculated that this means an additional 44p more tax per bottle of wine. The WSTA have said that these changes mean that some 90% of all still wine will experience a duty increase. According to Miles Beale, Chief Executive of the WSTA, this will be“the largest increase in wine duty since 1975”.

For spirits, like whisky, that exceed the 22% ABV, the duty is set to be £31.64 per litre of alcohol in the product. Graeme Littlejohn, Director of Strategy at the Scotch Whisky Association, explained that this duty rise would result in almost 75% of an average priced bottle of whisky going directly to the Treasury through duty and VAT.

For a more detailed breakdown of the alcohol duty rate changes click the link below to read the Government’s policy paper.

Related Posts