ALCOHOL prices will rise from today – just in time for millions to celebrate the end of dry January.
The increase in alcohol duty was announced by Rachel Reeves in the Autumn budget last year.
The alcohol tax will rise in line with the Retail Price Index, which is currently 3.6%.
Alcohol duty is paid by manufacturers when they make their products.
Typically spirits and wines are taxed more heavily than ciders and beer due to their higher alcohol content.
The duty is generally passed on to consumers by manufacturers, who decide how much to push up the cost of their products.
A new system to tax wines and spirits based on strength is being introduced at the same time.
This means the duty on a bottle of wine with an ABV of 14.5% will increase by 54p.
Meanwhile, the duty on a bottle of gin will rise by 32p.
The changes to excise duty and taxing wine according to strength came into effect on August 1, 2023.
But the last government introduced a temporary reprieve for wines with a strength of between 11.5% and 14.5%.
These wines were taxed at a flat rate of 12.5%.
[bc_video account_id=”5067014667001″ application_id=”” aspect_ratio=”16:9″ autoplay=”” caption=”Birra Moretti Steals the Crown from Carling!” embed=”in-page” experience_id=”” height=”100%” language_detection=”” max_height=”360px” max_width=”640px” min_width=”0px” mute=”” padding_top=”56%” picture_in_picture=”” player_id=”default” playlist_id=”” playsinline=”” sizing=”responsive” video_id=”1807990283206225556″ video_ids=”” width=”640px”]The cost of a 14.5% ABV bottle of red wine has risen by 98p in 18 months, according to the Wine and Spirit Trade Association.
These calculations take into account the August 2023 duty hikes.
Meanwhile, new costs are set to come into effect later this year, which will push up the price of your favourite tipple even further.
Changes to waste packaging recycling fees will come into effect in April and could add an additional cost of 12p for a bottle of wine and 18p for a bottle of spirits.
[authenticated-scripts src=”%3Cscript%20class%3D%22palin-poll%22%20src%3D%22https%3A%2F%2Fwww.thesun.co.uk%2Fpollingwidgets%2Fv3%2Fwidget.js%3Fquestion_id%3D105132%26game%3Dpolling%22%3E%3C%2Fscript%3E” type=”embedded” width=”100″ /]But there is some good news for those who prefer a pint at the pub.
The duty on draught products will be cut by 1.7% from today, which is equivalent to a penny off a pint in the pub.
The duty on alcohol has soared in the past 18 months.
The hikes in duty and tax in August 2023 were the largest in almost 50 years.
They added 20% to excise duty on more than 85% of all wines in the UK market and more than 10% to duty paid on full-strength spirits.
The latest figures from HMRC show that alcohol tax receipts have fallen by £209million in the financial year to December 2024, compared to the previous year.
WSTA chief executive Miles Beale said: “There are no winners under the UK’s punishing alcohol tax regime – higher duty rates mean people buy less which results in reduced income to the Exchequer, businesses are being squeezed and consumers have to pay more.”
He added that the pain of price hikes will not stop there as new taxes on waste packaging are yet to come.
He said: “This seemingly never-ending assault on wines and spirit businesses means consumers need to brace themselves to pay substantially more for their favourite products.”
Exchequer Secretary to the Treasury James Murray said: “Our pubs and brewers are an essential part of the fabric of the UK and our brilliant high streets.
“Through draught relief, small producer relief, and expanding market access for smaller brewers, we will help boost sector growth and deliver our Plan for Change to put more money in working people’s pockets.”
What else is happening to pubs?
The news comes as pubs have been forced to push up their prices to cope with changes announced in the Autumn budget.
Wetherspoons hiked the price of a host of popular drinks and menu items earlier this week.
It means the cost of drinks has gone up by 15p and meal deals by 30p.
The hike will see the cost of a Guinness at The London and South Western branch in South-West London go from £4.66 to £4.81.
Meanwhile, the price of a Strongbow will increase from £3.24 to £3.39.
Spoons has said several drinks including Carling, Budweiser and Coors will not go up in price.
The average price of a meal deal at Spoons without an alcoholic drink was £4.99 but the 30p rise will mean it now costs £5.29.
The same meal deal with an alcohol drink would set you back £6.52 but after the price hike it will cost £6.82.
Wetherspoons boss Tim Martin said: “Wetherspoon has always tried to remain as competitive as possible. We hope that our prices will still be reasonable in spite of these increases.’’
The decision comes as from April employers will need to pay more in National Insurance.
The rate at which employers make National Insurance Contributions will increase from 13.8% to 15%.
Meanwhile, the threshold at which businesses pay them is being lowered from £9,100 to £5,000.
Customers at Young’s pubs face paying 20p more for a pint after the Autumn Budget.
Simon Dodd, chief executive of Young’s, said the chain will hike its prices by between 2.5% and 3% because of these increased costs.
Mr Dodd said the upcoming National Insurance hike will add around 20p to the cost of a pint sold for £6.30 in London to £6.50.
He said: “We’ll mitigate as much as we can of the NI contribution – we’ll do that through efficiency, we’ll do that through investing in our pubs.
“But there will be some price passed on to the consumer.”
Meanwhile, All Bar One owner Mitchells & Butlers told The Sun last year that the price of its pints could rise by between 10p and 15p.
The group, which also owns Toby Carvery, said higher wage expenses were “by far the most significant increase” in its cost base following the Autumn Budget.
Its chief executive Phil Urban said the chain was facing around £23million a year in extra costs just from the rise in National Insurance, with the increase in the minimum wage also sending its wage bill surging.
In November, chief executive of pub chain Fuller’s, Simon Emeny, said the price of beers at its hotels and pubs would likely be hiked by 10p.
The boss of the brewing giant slammed the decision to hike NICs as “counter productive to growth”.
Unlock even more award-winning articles as The Sun launches brand new membership programme – Sun Club.