United Kingdom hikes wine duty but freezes duty on beer, spirits and cider

UK – United Kingdom Chancellor Phillip Hammond has announced that duty tax on wine will increase while that on beer, spirits and cider would remain the same in line with the rate of inflation, effective 1 February 2019.

Duties on beer and spirits will remain at the same level as last year in a bid to help the country’s pubs while those on wine will increase in line with the retail price index.

However, tax on high-strength, cheap white ciders will also rise.

In his UK Budget 2018 outline, the Chancellor said that freezing taxes against the rate of inflation will mean drinkers will save an average of 2p on every pint of beer and 1p per pint of cider in 2019, as well as saving 30p on a 70cl bottle of Scotch Whisky.

The Chancellor was expected to raise duties across all alcohol types in line with inflation, but now for the second year, the government has frozen duty on beer.

In last year’s statement, duty on beer, cider, wine and spirits did not rise in keeping with inflation although special measures were put on high-alcohol, low-price white cider, and according to Hammond these higher rates on ciders with an ABV above 7% are set to come into force next year.

The decision comes after the drink industry lobbies Campaign for Real Ale (CAMRA), the British Beer and Pub Association (BBPA), the Society of Independent Brewers (SIBA) and the Scotch Whisky Association (SWA) warned of more pub closures.

They industry has welcome the move saying it was a big step in the right direction and a huge help for struggling pubs across the UK.

A blow for wine lovers

The duty rate on spirits remains (US$32.61) £28.74 per litre of pure alcohol.

Tax on wine will still rise alongside inflation, meaning punters will pay 7p more per bottle in 2019, and the hike is expected not only to affect England wine industry but also see price increase for consumers.

Miles Beale, chief executive of the Wine & Spirits Trade Association (WSTA) said: “The Chancellor to increase wine rates significantly is a hammer blow to this great British industry.”

“It actively undermines a sector that has been hardest hit since the Brexit Referendum and will be thoroughly unwelcome for the 33 million consumers of the nation’s most popular alcoholic drink.”

According to the trade association, the duty increase on wine would raise the price of a bottle by 7p on still wines, and by an extra 9p on sparkling and fortified wine.

WSTA indicates that the country has become the sixth-largest wine market in the world given that drinkers have showed shifting preferences from beer to wine.

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