Drinkers who enjoy a cocktail or a gin and tonic could face another price hike as Jeremy Hunt considers increasing drinks duty for the second time in just six months.
Distillers have warned they may have to cut their production if the tipple tax goes up again. Chris Jaume, co-founder of Cooper King Distillery in York, said the August duty hike has already increased the price of spirits.
He said: “If duty continues to rise, we’ll see demand and production drop, and our green investments stall. I’m just one of hundreds of distillers across the country who are worried for their future.
“The Chancellor must freeze duty on spirits in the Autumn Statement and support our sector.”
Duty on many spirits and wine increased from August, the first increase in drinks duty since 2020.
The UK Spirits Alliance (UKSA) warned many pubs and bars are already struggling with risings costs. The group said the ‘Brexit Pub Guarantee’, slashing 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 spirit industry needs Government support to “survive and thrive”.
She said: “Spirits make up one third of all alcoholic drinks served in hospitality settings. Policies and tax must reflect and support modern day drinking, entrepreneurship, and growth.
“The Government risks penalising a big group of drinkers and undermining a British business success story. To support the current emergence and transformation of pubs and bars, the Government should support the spirits sector and get behind Britain’s world-famous hospitality industry. In the Autumn Statement, alongside distillers, we urge the Chancellor to back a duty freeze on spirits.”
A survey of distillers by Survation found six in 10 spirit makers are already expecting to cut the amount of alcohol they produce.
Seven in 10 of the distillers said they would struggle to find money to pour into business and production upgrades if they are hit with another duty hike.
The UKSA warned the Government’s current pubs policy is “hurting our pubs and bars and those consumers who choose to enjoy cocktails, spritz, or gin and tonic”.
Under the changes brought in from August, all alcoholic products are taxed in line with ABV (alcohol by volume) strength with lower taxes for lower alcohol drinks.
The Government also brought in a Small Producer Relief, replacing 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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