Alcohol prices – what drinks will cost more?
Changes to the way alcohol is taxed is leading to price changes – both up and down – for consumers.
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Louise Thomas
Editor
Changes to the way alcohol is taxed will see hikes of up to 20% on wine while other low-strength options will cost less.
The Government’s decision to tax alcohol based on its strength has led to spirits and wine manufacturing groups complaining they have been unfairly hit.
The overhaul coincides with Chancellor Jeremy Hunt’s ending of the freeze of alcohol duty on August 1, meaning it will increase by inflation at 10.1%.
Duty will increase overall, with most wines and spirits seeing rises, but will fall on lower-alcohol drinks and most sparkling wine.
Drinks with alcohol by volume (ABV) below 3.5% will be taxed at a lower rate, but tax on drinks with ABV over 8.5% will stay the same, whether it is wine, spirit or beer.
As a result, sparkling wine, which was previously taxed at a higher rate than still wine, will be 19p cheaper, for a standard-strength bottle, if retailers pass on the tax changes by lowering prices.
A can of pre-mixed gin and tonic would be 5p cheaper.
The increase will see duty rise by 44p on a bottle of wine, which when combined with VAT will mean consumers will pay an extra 53p, according to the Wine and Spirit Trade Association (WSTA).
Duty on 18% cream sherry will go up from £2.98 to £3.85, with VAT adding up to an increase of more than £1 a bottle, while a bottle of port will go up by more than £1.50.
The total tax on a bottle of gin or vodka will go up by around 90p.
Other examples of price drops provided by the Treasury include Irish cream falling by 3p, prosecco by 61p and 500ml 3.4% pale ale by 20p a bottle.
A 4.5% ABV pint of draught apple cider will be 1p lower, while a 3.4% ABV 500ml bottle of beer will be 20p lower in a shop and 25p lower in a supermarket,.
Consumers should see a bottle of 9.5% ABV white wine fall by 24p, an 11% ABV bottle of 75cl sparkling drop by 61p and a bottle of 8.4% ABV sparkling down by 72p.