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.


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.
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.
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

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’.
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 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.

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