Rachel Reeves has announced a decreased draught duty as part of the 2024 Autumn Budget – saving drinkers a penny off a pint in the pub.
The Chancellor did say alcohol duty rates on non-draught products will increase in line with RPI next year as a part of Labour’s efforts to plug what it claims is a £22 billion ‘black hole’ in public finances.
But good news for beer lovers – under Labour’s plans, the price of a pint will decrease by a penny.
But leading figures in the drinks industry have warned the move will further restrict sales and result in more pub closures.
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Alcohol duty was frozen for almost three years from autumn 2020 to August 2023, during which time the UK saw an increase in taxable revenue.
But following then-Chancellor Jeremy Hunt’s tax on alcohol in 2023 in line with inflation, prices went up by 10%. He also changed the way duty was calculated for wine, which saw it increase in price by 20%.
From September 2023 to August 2024 alcohol duty raised £11.8 billion, down from £13.1 billion in the same period the year before.
The biggest drop was for spirits, whose revenue plummeted by £750 million, followed by beer which saw a £320 million drop in profits.
Emma McClarkin, the chief executive of the British Beer and Pub Association (BBPA): ‘We know from experience that beer duty increases rarely raise expected revenues, especially when many consumers are facing the cost-of-living crisis and are increasingly sensitive to price.
‘It’s imperative that the Government realises that any hike in beer duty won’t just turn away customers, it could have a catastrophic knock-on effect.
‘Any fall in demand might reduce other taxes and employment opportunities. Only when they reduce the cost of business can pubs continue to be a vital asset to both the economy and communities.’
The drinks firm behind Magners and Tennent’s said it has seen ‘some consumer caution’ ahead of today’s budget.
It came as C&C Group revealed lower sales for the past half-year as poor summer weather hit demand for cider.
Shares in the company slipped on Tuesday morning as a result.
The company said: ‘Trading conditions remain tough, and sentiment regarding the UK autumn Budget has generated some consumer caution; however, positively, we have well-executed plans in place for the Christmas and New Year period, as well as encouraging trading momentum.’
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