Taxes on alcohol will change in August and it means booze is set to become more expensive.
First announced in the Spring Statement, from August 1, alcohol duty rates will rise by 10.1%, in line with September 2022's inflation figure.
At the same time, the way alcohol will be taxed will also change as from August, a new system will be introduced and will tax alcoholic drinks according to strength.
It means alcohol will be taxed higher the strong they are - so a 40% alcohol by volume (ABV) bottle of whiskey will be taxed more than a 13% ABV bottle of wine.
The new system replaces the current Alcohol Duty system, which consists of four separate taxes simply covering beer, cider, spirits, wine and made-wine.
The new tax system was announced in 2021 during the then Chancellor Rishi Sunak's autumn budget. where he called the change “the most radical simplification of alcohol duties for over 140 years”.
Between the announcement and the implementation, the Government froze alcohol duties due to the pandemic and the cost of living crisis.
According to the British Beer and Pub Association, ending the alcohol duty freeze will cost the industry around £225million.
Industry experts at the Wine and Spirit Trade Association said the changes would particularly impact wine, as the unfreeze and shakeup could see taxes on a 75cl bottle rise by 20%.
This is the largest increase in wine duty since 1975 and could see the price of an average bottle of red or white wine bought in a supermarket rise by around 44p.
In a statement to Sky News, Simon Stannard, director of policy at the Wine and Spirit Trade Association said: "Alcohol tax rises will only further fuel inflation.
"It will heap more misery on consumers. And it will damage British business, especially those in the hospitality supply chain, who are still trying to recover from the pandemic."
However, drinks purchased in pubs are set to see a price cut from August under the "Brexit pubs Guarantee".
The "Draught Relief" will cut alcohol duty by 9.2% for beer and cider and 23% for wines, spirits and other fermented products purchased in pubs.
According to the Chancellor Jeremy Hunt, this will see beer and cider sold in hospitality venues be 11p cheaper than booze sold in supermarkets.
Commenting on the changes, exchequer Secretary to the Treasury Gareth Davies said: "Because we left the EU we can make sure our alcohol duty system works for us.
"From next month the whole system will be simpler – the duty will reflect the strength of the drink.
"We will also protect pubs and brewers with our Brexit Pubs Guarantee keeping Draught Duty down, and a new Small Producer Relief.
Alcohol Duty changes from August
- Port 20% abv 75 cl - Now: £2.98 August: £4.28 Difference: +£1.30
- Sherry 15% abv 75cl - Now: £2.23 August: £3.21 Difference: +97p
- Vodka 37.5% abv 70cl - Now: £7.54 - August: £8.31 - Difference: +76p
- Still Wine 12.5% abv 75cl - Now: £2.23 August: £2.67 Difference: +44p
- 440ml can beer 4.5% off trade - Now: £0.38 August: £0.42 Difference: +4p
- 440 ml can cider 4.5% off trade - Now: £0.18 August: £0.19 Difference: +1p
- pint cider 4.5% on-trade (draught) - Now: £0.23 August: £0.23 Difference: 0p
- pint beer 4.5% on trade (draught) - Now: £0.49 August: £0.49 Difference: 0p
Spirit-based Cream Liqueur 17% abv 70cl - Now: £3.42 August: £3.39 Difference: -3p
Pre-Mixed G&T 5% abv 250 ml - Now: £ 0.36 August: £0.31 Difference: -5p
- Sparkling Wine 12% abv 75cl - Now: £2.86 August: £2.76 Difference: -19p
