Business

Wine and gin drinkers will have to shell out more from today as alcohol taxes rise.

The shake-up aims to encourage drinkers to cut back by taxing all alcohol based on its strength, rather than the previous categories of wine, beer, spirits and ciders.

The increase will see duty rise by 44p on a bottle of wine – something announced a few months ago in the budget.

When combined with VAT, the real increase per bottle will be 53p, the Wine and Spirit Trade Association (WSTA) said.

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Chancellor Jeremy Hunt said in March that a freeze on alcohol duty would end on 1 August and increase in line with the Retail Price Index measure of inflation, which was 10.7% last month.

All types of tipple are therefore affected.

Duty on an 18% cream sherry will go up from £2.98 to £3.85.

Combined with VAT, it adds up to an increase of more than £1 a bottle, while a bottle of port will go up by more than £1.50.

The total tax on a bottle of gin or vodka will rise by about 90p.

For beer drinkers, Mr Hunt is cutting the duty on draught pints across the UK by 11p.

It is seen as a measure designed to boost pubs, many of which have been closing.

Prime Minister Rishi Sunak hailed the move as beneficial to “thousands of businesses across the country”.

However, the British Beer and Pub Association said brewers will pay 10.1% more tax on bottles and cans of beer from Tuesday.

It means duty will make up about 30% of the cost of a 500ml bottle.

Scotch Whisky Association director of strategy Graeme Littlejohn described the 10.1% duty increase as a “hammer blow for distillers and consumers”.

He warned: “Pubs and other on-trade businesses are about far more than beer and cider.”

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The Treasury has said that more than 38,000 UK pubs will benefit from tax relief that effectively freezes or cuts the alcohol duty on beer poured from tap from Tuesday.

Mr Hunt said: “British pubs are the beating heart of our communities and as they face rising costs, we’re doing all we can to help them out. Through our Brexit Pubs Guarantee, we’re protecting the price of a pint.

“The changes we’re making to the way we tax alcohol catapults us into the 21st century, reflecting the popularity of low alcohol drinks and boosting growth in the sector by supporting small producers financially.”

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