Jeremy Hunt urged to freeze alcohol duty for struggling pubs in Autumn Statement | Personal Finance | Finance
Drinkers who enjoy cocktails or gin and tonics could face another price rise as Jeremy Hunt considers increasing drinks duty for the second time in just six months.
Distillers have warned they may have to cut production if the tipple tax is raised again. Chris Jaume, co-founder of Cooper King Distillery in York, said the August duty hike is already driving up the price of spirits.
He said: “If the duty continues to rise, we will see demand and production fall, and our green investments stall. I am just one of hundreds of distillers across the country who are worried about their future.
“The chancellor must free spirits in the Autumn Statement and support our sector.”
Duty on many spirits and wine increased from August, the first rise in liquor duty since 2020.
The UK Spirits Alliance (UKSA) has warned that many pubs and bars are already struggling with rising costs. The group said the ‘Brexit Pub Guarantee’, which levies tax on some beers and pre-mixed drinks, has had little effect.
Neema Rai, owner of Battersea Barge and Tamesis Dock in London, said the spirits industry needed Government support to “survive and thrive”.
She said: “Spirits make up a third of all alcoholic drinks served in hospitality settings. Policies and tax need to reflect and support today’s drinking, entrepreneurship and growth.
“There is a risk that the Government will penalize a large group of drinkers and that British business success will be undermined. To support the current emergence and transformation of pubs and bars, the Government should support the spirits sector and support Britain’s world-renowned hospitality industry. In Autumn Statement, together with distillers, we urge the Chancellor to support the freezing of duty on spirits.”
A Survation survey of distillers found that six in ten spirits makers are already expecting to reduce the amount of alcohol they produce.
Seven in 10 distillers said they would struggle to find money to pour into business and upgrade production if hit by another duty hike.
The UKSA has warned that the Government’s current pub policy is “hurting our pubs and bars and those consumers who choose to enjoy a cocktail, spritz, or gin and tonic”.
Under the changes introduced from August, all alcoholic products are taxed in proportion to their ABV (alcohol by volume) strength with lower taxes on lower alcohol drinks.
The Government also introduced Small Producers’ Relief, which replaced the Small Brewers’ Relief scheme. This provides reduced duty rates for small businesses producing products with less than 8.5 percent ABV.
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