Budget: ‘Brexit pub guarantee’ means ale is 11p cheaper than supermarket booze but wine guzzlers will pay more
Beer and other draught products in pubs will be 11p cheaper than in supermarkets, Jeremy Hunt has announced, calling the tax relief a “Brexit pub guarantee” which will come into effect from April 1.
In the Spring Budget this afternoon, the Chancellor said that the measure would not have been possible if the UK remained in the EU and will also be available in Northern Ireland thanks to the Windsor framework.
“From August 1 the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee,” Hunt said.
“British ale may be warm, but the duty on a pint is frozen,” he added.
This is in addition to Hunt’s previously announced measures which will see planned hikes in alcohol duty put off until 1 August.
In his last Autumn Statement Hunt that the prices would go up in February, in an attempt to salvage a decision made by his predecessor Kwasi Kwarteng.
However, the treasury has now froze the duty until August 2023 when a new system for calculating taxes on alcohol is also set to come into force.
“The reduction in draught duty is positive and we hope this will incentivise more visits to our pubs, restaurants and hotel bars,” Kate Nicholls, chief executive of UkHospitality said.
“Addressing draught duty is a good start and I would urge the government to consider rolling out this type of tax cut across the wider drinks market.”
She added: “With duty primarily paid by suppliers, such as breweries, it’s essential that any benefit is passed through to venues to help deliver the government’s objective of reducing inflation and growing the economy.”
While pub owners were handed a life line, the nations wine drinkers were hammered with a ‘two-pronged’ tax raid which could see the price of a some wines soar by almost 50p per bottle.
It comes as the Wine and Trade Association (WSTA) warned that these measures would see wine drinkers face the biggest single increase in almost 50 years.
“The UK’s 33 million wine drinkers are blissfully unaware that the price of wine is set to rocket this summer,” Miles Beale, chief executive of the WSTA.
Beale said that by adding an “inflationary duty increase” on top of the stealth tax already applied when the government’s new alcohol duty regime kicks in this summer, duty alone will add “44p to a bottle of still wine”.