Chancellor Rishi Sunak has set out a five-step plan to overhaul alcohol duty, speaking at the Budget.
The current system is “outdated, complex and full of historical anomalies”.
The number of main duty rates will be cut from 15 to six with an aim to “end the era of cheap, high-strength drinks.”
Drinks are to be taxed in proportion to their alcohol content, “making the system fairer and more conducive to product
innovation in response to evolving consumer tastes”, official documents stated.
New rates will be introduced for low strength drinks below 3.5 per cent ABV as an incentive for manufacturers to develop new products at lower ABVs.
He said he will “modernise the system to reflect how people drink today,” after consumers’ thirst for sparkling wine, light prosecco and English sparkling wine has increased.
He will also introduce a new small producer relief and end duty premium on sparkling wines and fruit cider.
A planned increase of duty on spirits next year will be cancelled and there will be a lower rate of duty on draught beer and cider with a cut of 5 per cent. This will reduce the price of a pint by 3p.
English wine producer Chapel Down welcomed the announcement with CEO Andrew Carter saying the duty saved “will enable the industry to create jobs, support families, and bring even more young talent into this exciting, developing sector as it recovers from the pandemic.”