Tring distillery owner disappointed at lack of support for spirits sector in budget
A cut in the draught alcohol duty was announced, while spirits and wines will continue to face tax increases
In the wake of yesterday's budget announcements, the owner of a Tring-based distillery expressed his frustration at the limited relief offered to small producers in the spirits industry.
Ben Marston who runs Puddingstone Distillery in Tring said it's another blow for them and highlighted concerns over increased financial pressures on the spirits industry, citing a missed opportunity for support in the form of an alcohol duty freeze.
The budget, the first under the new administration, did not offer the hoped-for freeze or reversal in alcohol duty, a move that distillers say would have helped ease rising costs.
"We were hoping for a minimum of a freeze, ideally even a reversal of last year’s duty increase," Mr Marston said.
"With the duty set to rise in line with the MPI, we’re looking at an additional £0.25 in alcohol duty on each bottle of gin at 42% ABV."
He noted that the new measures disproportionately affect spirits, while draught beer has been targeted for relief.
The distillery owner explained that these additional costs, coupled with rising supply chain expenses, could put even more pressure on businesses like his, as larger suppliers facing new tax thresholds are likely to pass on their own cost increases.
"Unfortunately, we may see the cost of goods and services increase, and that’s going to impact our ability to keep prices stable for our customers."
While acknowledging the overall benefits for certain industries, such as draught beer, he noted the impact of repeated tax increases on small distilleries.
He said: "The spirits and wine industries seem to have been left behind again. Smaller breweries pay less duty, which has spurred growth and ultimately brought in more revenue for the government. That’s a model that could support us too.
"Every time we face a cost increase, it comes with a hard decision – do we absorb it or pass it on to the consumer?
"Absorbing the cost means cutting into the funds we need to reinvest in our business or, quite frankly, to pay ourselves what we should be."
In the absence of immediate support, he stressed that the spirits sector is facing a difficult future.
What did the Government announce?
Chancellor Rachel Reeves yesterday said in her Budget announcement: "I can confirm that alcohol duty rates on non-draft products will increase in line with RPI from February next year.
"But nearly 2/3rds of of alcoholic drinks sold in pubs are served on draft, so, today, instead of uprating these products in line with inflation, I am cutting draft duty by 1.7%."