Hertfordshire distillery calls for alcohol tax freeze in next week's Budget

Businesses in the alcohol industry are hoping for a freeze of the alcohol tax in next week's budget announcement, described by a Hertfordshire Distillery as "the best they can hope for".

The Prime Minister hailed the October 30 fiscal event as a historic moment, describing it as Labour's first chance to "define the way in which we will approach the economy" after 14 years in opposition.

However from social care to the NHS or the hospitality sector, fears of cuts to services and increases to duty are rising.

Ben Marston, co-founder of Puddingstone Distillery, voiced concerns over the negative impact of the Conservative Government alcohol duty increases on small producers in the spirits industry.

Speaking to Greatest Hits Radio, he explained how the government's attempt to raise revenue through higher alcohol taxes has had unintended consequences, leading to a drop in sales across the sector, including wine, beer, and spirits.

He said: "The biggest change noticed by the whole industry is the reduction in sales.

"That goes against everything that I think the government were hoping to achieve.

"In terms of generating alcohol revenue, they thought that if they put alcohol duty up, they’d make more money. In fact, it’s gone completely the opposite."

This downturn has not only affected producers like Puddingstone Distillery but has also trickled down to the hospitality industry, retailers, and consumers.

According to Mr Marston, many producers have been unable to absorb the increased costs, forcing them to pass these expenses on to their customers, which in turn has led to a further decline in sales.

For small businesses like Puddingstone Distillery, the impact has been significant.

Mr Marston explained that the decline in sales has made it harder for companies to reinvest in their growth.

Additionally, small producers often play a vital role in supporting local charities and communities, but financial pressures have limited their ability to do so.

Added to a challenging year are concerns over the survival of small businesses, particularly given the broader economic challenges stemming from the COVID-19 pandemic and Brexit.

Mr Marston said: "I would say that it’s the biggest concern across the whole industry.

"If you look at the reports coming out from industry bodies, the figures for a decline in the number of businesses are really alarming."

Despite these challenges, Mr Marston expressed hope that the new Government might reconsider its approach.

Industry bodies are currently calling for a freeze in alcohol duties to stabilise the situation.

"The best we can hope for is a freeze to stabilise things," he added.

The coming months, particularly the busy Christmas season, will be critical for many in the spirits and hospitality sectors.

As Mr Marston pointed out, the timing of last year's duty increases, just before the end-of-year sales period, only made the situation more difficult for small businesses, and their hope is to avoid another blow.

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