New alcohol tax system defended by Prime Minister

There are calls for the government to reverse new changes to the way alcohol is taxed.

From today, alcohol duty will be simplified to a system whereby the amount of tax on a drink will be determined by its alcohol content.

It replaces the current Alcohol Duty system, which consists of four separate taxes covering beer, cider, spirits, and wine.

Government ministers claim it will make the system "fairer" and more "responsive to new products entering the market," but pub owners are warning it could mean a big hit to consumers.

That's because it comes into effect on the same day as a freeze on alcohol duty has been lifted.

Mr Sunak described the overhaul as “the most radical simplification of alcohol duties for over 140 years”, enabled by Britain’s exit from the EU.

In March’s Budget, Chancellor Jeremy Hunt also announced that the freeze to alcohol duty would end on August 1 and increase by inflation, at 10.1%.

How much money will the changes add to booze?

The increase will see duty rise by 44p on a bottle of wine, which when combined with VAT will mean consumers will pay an extra 53p, according to the Wine and Spirit Trade Association (WSTA).

Duty on 18% cream sherry will go up from £2.98 to £3.85, with VAT adding 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 go up by around 90p.

Rishi defends changes

The Prime Minister said: “I want to support the drinks and hospitality industries that are helping to grow the economy, and the consumers who enjoy the end result.

“Not only will today’s changes mean that that the price of your pint in the pub is protected, but it will also benefit thousands of businesses across the country.

“We have taken advantage of Brexit to simplify the duty system, to reduce the price of a pint, and to back British pubs.”

"It isn't good for the industry"

Tony Callaghan, who owns a number of pubs in Wigan, said:

"It's disappointing that the alcohol freeze has been lifted. When you look into it, we have got an increase, for example, on vodka: 10%; on beer: 4%; cans of beer: 10%; sherry: 44%; the standard wine: 20%. So there are some big increases.

"It isn't good for the industry in the economic climate that we're living in; it's going to put yet another obstacle in the way.

"The government has tried to make the system a little simpler but yet again, it's a real concern for a lot of operators up and down the country.

"We've been hit massively with our energy costs, people haven't returned since COVID, and it's a very hard industry to work in.

"I think the government really, really needs to rethink for the hospitality sector and help us in any way they can.

"I don't think increasing duty is any help whatsoever. It's just yet another hindrance."

Meanwhile, the government has announced new measures today alongside the previously announced changes to alcohol duty, which they say will provide a boost to thousands of pubs.

They say the duty paid on drinks on tap in pubs will be "up to 11p lower than at the supermarket."

They say the changes are designed to help pubs compete on a level playing field with supermarkets.

It's been dubbed "The Brexit Pubs Guarantee".

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