Pints will continue to get more expensive despite the Chancellor’s 5% beer duty cut. A pub boss warned that it would only ‘take off’ a 30% price rise due inflation. 

Shepherd Neame chief executive Jonathan Neame stated that the company would pass on the 3p per pint duty cut on kegs sold to pubs. However, this would not ease the pinch on drinkers’ pockets. 

Rishi Sunak also announced that a planned increase in the duty on spirits and wine, cider, and beer would be cancelled, while the 28% ‘irrational’duty on premium sparkling wines such as prosecco, and fruit ciders, will be reduced. 

Rishi Sunak today unveiled a major overhaul of the UK's alcohol taxes as he cut the price of a pint of draught beer and cider by three pence. He is pictured with Boris Johnson at a brewery in Bermondsey, London this afternoon

Today Rishi Sunak announced a major overhaul in the UK’s liquor taxes. He cut the cost of a pint draught beer or cider by three pence. He is pictured this afternoon with Boris Johnson at Bermondsey’s brewery.

How will your drink’s price change?

Echo Falls Zinfandel rose wine: 23p less in tax in shops

Stella Artois: 3p less taxes on a draught pint at the pub, no change for shops

– Guinness: A pint of Guinness is 3p less tax in the pub, and there is no change in the shops. 

Strongbow: 2p per pint less tax in the pub, 0.5p in shops 

Strongbow Dark Fruits: 1p less tax in shops, 13p less tax in the pub on a pint

35p more tax in shops on Hardy’s VR Merlot red wines 

Canti Prosecco: In shops, 87p less tax per bottle  

– Harvey’s Sherry, 51p more tax on a bottle at shops 

– Taylor’s Port: £1.09 more tax on a bottle in shops. 

Smirnoff Vodka: There is no price change in stores. 

Bailey’s Irish Cream: A 41p lower tax per bottle in shops  

Source: HM Treasury 

Responding to the news, Mr Neame told Radio 4’s Today programme: ‘We will pass on the duty cut at a wholesale, but in all honesty, pubs are facing between 25 to 30p per pint inflation and this will do will take the top off that. 

It will reduce the rate at which it rises, but most hospitality businesses are affected by 14% inflation. So while I’d love to see beer’s price drop, it’s very hard to believe that, as a lot more inflation is still occurring in terms energy, food, etc. 

“At the moment there is a tremendous supply chain squeeze that most people anticipate will last six to nine months, and hopefully after that inflation will begin to ease off.”

Most pubs will also benefit from £7billion worth of cuts to business rates, including the cancellation of next year’s increase in the rates multiplier and a 50% cut in the total bill. 

Mr Neame was happy with the move, but argued that there was still more to do. 

He said that while it won’t help Shepherd Neame as a multi-site operator, it will help our tenanted licencees which make up two-thirds our pubs. It’s a huge benefit for them and it stimulates investment, as rates would rise if you invested before. 

“I think that the opportunity for fundamental reform of rates has been missed. This is a medieval tax which doesn’t balance the overall economic activity between digital and nondigital worlds. It is too burdensome for hospitality and retail. 

The teetotal Chancellor used the Budget to create a new Draught Relief policy that will see cider and beer duty reduced by 5%. 

He stated that this was the largest reduction in beer tax in 50 years, and the largest reduction in cider duty since 1923. 

He also announced that the planned increase in duty on spirits, wine and cider will be cancelled and the ‘irrational 28% duty on premium sparkling wines, such as prosecco, will be cut.     

What are the main changes in the alcohol tax system, and how will prices change.

– The duty rates on draught beer, cider, and wine will be reduced by 5% – three pence per liter. 

– The duty rate for draught apple cider will be equalised to beer, reducing the rate by 20%, and slashing 13 pence per pint.

All products will now be taxed according their Alcohol By Volume (ABV). This will reduce duty on cider and lighter wines. The tax on a 10.5% Rose bottle will drop by 23 pence per bottle. The levy on white wines and stronger still wines will rise.  

Sparkling wine will be subject to the same tax as still wine, eliminating the 28 percent premium currently in place. 

However, the Chancellor’s plan to simplify the alcohol duty system – which he said was made possible by Brexit – will see some drinks become more expensive, with red wine drinkers among those hit.

Mr Sunak stated that his new system, which will be in effect from February 2023, will make it more difficult to tax stronger drinks.  

It will also mean that weaker drinks, such as rose wine or liqueurs, will become less expensive.

Boris Johnson, Prime Minister of the United Kingdom, and Mr Sunak attended the Fourpure Brewing Company in Bermondsey. They sampled pints and observed the brewing process. 

Hospitality leaders welcomed the changes announced Mr Sunak. 

They said that pubs, beer brewers, and beer drinkers were “…”We will be toasting Chancellor’s for bringing forward “a range of business-boosting actions”.   

Emma McClarkin is the chief executive of British Beer and Pub Association. She stated: “Pubs and brewers and beer-lovers will be toasting today the Chancellor for a variety of business-boosting initiatives.

‘Pub goers will also be toasting the Chancellor today for announcing a five per cent lower duty rate on draught beer worth £62million.

“This is great news for our local pubs, and recognizes the critical role they play in our economy.

“However, the overall beer duty rate for the UK is still among the highest in Europe.

‘It is vital for Britain’s brewers, a world class homegrown manufacturing success story, that the overall beer duty burden is reduced – not just duty on draught beer in pubs.’

Mr Sunak said that under his new system - which be rolled out in February 2023 - the stronger the drink, the higher the rate of tax will be

 Mr Sunak said that under his new system – which be rolled out in February 2023 – the stronger the drink, the higher the rate of tax will be

The Chancellor said the Draught Relief amounts to the biggest cut on the tax on beer in 50 years and the 'biggest cut to cider duty since 1923'

The Draught Relief, according to the Chancellor, amounts to the largest tax cut on beer in 50-years and the ‘biggest reduction to cider duty since 1923’.

Ministers finally pay attention to the plight pubs’

Pub owner Ian Howarth, 45, (pictured) said the Budget would go some way to help his business following a ¿disastrous two years¿

Ian Howarth, 45 (pictured), is a pub owner who stated that the Budget would help him after a ‘disastrous couple of years’.

Pub landlord Ian Howarth said measures in the Budget would go some way to help his business following a ‘disastrous two years’ in which he lost more than £150,000 – but wants them to be implemented sooner.

Mr Howarth, 45, said ‘wet-led’ pubs like his that rely entirely on the sale of drinks had been left behind during the pandemic – particularly when hospitality premises could only open if serving meals.

He believes that the promise of a 50% reduction in business rates as well as a 5% cut in the duty on draught beers and cider is evidence that the Government is paying attention.

Mr Howarth, the Queen’s Head, Buxton, Derbyshire, runs said: “For once, it looks like wet business are finally being heard. We’re out of pocket by over £150,000 – but in terms of loss of earnings we’re probably down by £750,000.

“Because we make 70% from draught beers and cider, the recent announcement will help fill the gaps left behind by Covid.

Mr. Howarth, whose family has owned Queen’s Head since 1967 said that pubs were in ‘desperation’ for help sooner than 2023.

He said, “We’re already on our knees.” Instead of waiting until 2023 to make these improvements, we would rather see them implemented from midnight tonight.

“A lot of businesses are likely to go under before it is implemented, so we need to see these changes sooner than later.” 

The Chancellor told MPs that the existing alcohol duty system in the UK is ‘outdated, complex and full of historical anomalies’. 

He said his overhaul will deliver the ‘most radical simplification of alcohol duties for over 140 years’, resulting in a ‘simpler, fairer and healthier’ system. 

Sunak stated that Brexit made the shakeup possible and told the Commons that the Government is ‘taking advantage’ of the EU exit by implementing a series of changes.

These changes will result in a reduction of alcohol duties from 15 to six.

Sunak stated that the new system will be guided based on a common sense principle: “The stronger the drink, and the higher the rate.” 

He stated that this means that certain drinks, such as stronger red wines, fortified wine or high-strength white ciders, will see a slight increase in their rates, because they are currently undertaxed due to their strength.

“That is the right decision and will help end a era of cheap, high-strength beverages that can harm public health or enable problem drinking.

The Chancellor stated that the converse is also true for weaker alcoholic drinks. 

He said, “Many lower alcohol beverages are currently overtaxed and have been since many decades.”

‘Rose. Fruit ciders. Liqueurs. Lower strength wines and beers. Today’s changes will mean that they will pay less. 

Mr Sunak stated that the UK’s drinking habits had changed. More people are now consuming sparkling wines, as he made them more affordable. 

He said to MPs, “Over the last decade Prosecco has been consumed twice as much.” English sparkling wine consumption has increased tenfold. They are not the exclusive preserve of wealthy elites.

“And they’re no stronger than still wine, so I’m going to end their irrational duty premium (28%) that they currently pay.

“Sparkling wines, wherever they are produced, will now pay the same duty that still wines of equal strength.”

Tory MPs had pressured Mr Sunak to help struggling pubs. 

Many Conservative MPs had called for a reduction of beer duty. Mr Sunak responded by announcing his new ‘Draught Relief’ policy. 

 

 

Hospitality bosses welcomed the changes as they said pubs, brewers and beer drinkers 'will be toasting the Chancellor' for bringing forward a 'range of business-boosting measures'

Hospitality bosses praised the changes, saying that beer drinkers, brewers, pub owners and beer drinkers “will be toasting to the Chancellor” for bringing forward a number of business-boosting measures.

 

Bottles of Rose wine will see tax bills slashed. The tax applied to a bottle of Echo Falls Zinfandel will be 23p lower

Tax bills for bottles of Rose wine will be reduced by 23p 23p less tax will be applied to Echo Falls Zinfandel bottles

“The only upside?” There was no rise!

Pour show: Rob Weatherhead, 40, is ¿cautiously optimistic¿ about the reduced duty

Pour show: Rob Weatherhead, 40 years old, is ‘cautiously optimistic’ about the reduction in duty

 Wine seller Rob Weatherhead said many of his customers will pay more because they buy stronger red and white – which will not benefit from the cut in duty on bubbly and lower-strength drinks such as rose.

He is optimistic about the reduced duty, but he is also concerned about the fact that the change won’t come in until 2023.

Mr Weatherhead, 40 years old, purchased Affordable Wine, based out of Rochdale, this past year. He stated that the cut in champagne and sparkling wine duty was not a huge saving for either consumers or businesses. It’s a welcome addition, provided that the suppliers pass the reduction on to businesses.

He stated that while the price of sparkling wine would drop by 80p, some wholesalers may not be able to pass the savings on as they try to recover losses from the pandemic. He added that he would be watching to see how wholesalers react to the changes and if they see any benefits. Weatherhead suggested that if the changes had been made sooner, they could have a significant impact on Christmas stockings.

He stated that there was no upside to the situation. The average wine drinker will not consume sparkling wine for more than a week or a month.

Weatherhead is also concerned that families will spend less time at restaurants and buy less wine as the cost of living increases.

 

He stated to the Commons, “A fairer, more healthy system supports pubs so that I can today announce Draught Relief.

Draught Relief will apply a lower rate of duty to cider and draught beer.

It will apply to drinks served in draught containers exceeding 40 litres. It will be especially beneficial to community pubs, which do 75 percent of their business on draught.

“And let me tell you the House the new rate: Draught Relief will reduce duty by five percent.

“This is the largest reduction in cider duty since 1923, and the biggest reduction in fruit ciders for a generation. It also represents the largest reduction in beer duty for 50+ years.

‘This is not temporary, it is a long term investment in the British pubs of £100million a year and a permanent cut in the cost of a pint of 3p.’ 

He stated that these reforms were urgently needed and would be in effect by February 2023. 

Miles Beale (CEO of the Wine and Spirit Trade Association) welcomed the decision by the Wine and Spirit Trade Association to freeze wine and spirit duty. 

He said: ‘The decision to freeze wine and spirit duty comes as a huge relief to British businesses, the hospitality sector – including its supply chain – and consumers, giving everyone a much-needed break to help them recover from the pandemic.

We should give Rishi Sunak credit for listening to our pleas for support and understanding that tax hikes punishing the sector are not the best way of reinvigorating it.

‘By offering continued respite to the UK wine and spirit sector his actions will help save jobs and – in time – replenish revenues to the Treasury through growth in our potential-filled sector.’ 

Jez Lamb, founder and owner of Beers@No.42 in Wirral, asked if the shake-up would benefit smaller breweries. 

He said: ‘The devil’s always in the detail. It’s great to see alcohol duty reduced on draught beer, but it’s only for ‘containers more than 40L.

“This is great for big breweries, but many small craft breweries only have 30L containers.

“This just further supports big players in this market, and does not support the smaller, independent breweries that need most support.” 

 

 

 

Ministers finally pay attention to the plight pubs’

Pub owner Ian Howarth, 45, (pictured) said the Budget would go some way to help his business following a ¿disastrous two years¿

Ian Howarth (45), pub owner, said that the Budget would help his business after a ‘disastrous 2 years’.

Pub landlord Ian Howarth said measures in the Budget would go some way to help his business following a ‘disastrous two years’ in which he lost more than £150,000 – but wants them to be implemented sooner.

Mr Howarth, 45, said ‘wet-led’ pubs like his that rely entirely on the sale of drinks had been left behind during the pandemic – particularly when hospitality premises could only open if serving meals.

He believes that the Government is finally paying attention to the promises of a 50% reduction in business rates as well as a 5% cut in the duty on draught beers and cider.

Mr Howarth, the Queen’s Head, Buxton, Derbyshire, runs said: “For once, it looks like wet business are finally being heard. We’re out of pocket by over £150,000 – but in terms of loss of earnings we’re probably down by £750,000.

“Because we make 70% from draught beers and cider, the recent announcement will help fill the gaps left behind by Covid.

However, Mr Howarth, whose family has owned Queen’s Head since 1967 said that pubs were in ‘desperation’ for help sooner than 2023.

He said, “We’re already on our knees.” Instead of waiting until 2023 to make these improvements, we would rather see them implemented from midnight tonight.

“A lot of businesses are likely to go under before it is implemented, so we need to see these changes sooner than later.”