Sunak established a five-step plan to overhaul an Alcohol Duty system which is currently “outdated, complex and full of historical anomalies”. The number of main duty rates will be cut from fifteen to six with an aim to end what the Chancellor referred to as an era of cheap, high-strength drinks but taxing stronger drinks at a higher rate of the tax
New rates will be introduced for low strength drinks below 3.5% ABV, as an incentive for manufacturers to develop new products at lower ABVs, and changes will be made to reflect current consumer trends by levying no premium on sparkling wines, irrespective of where they are produced. Additionally, craft producers making drinks of under 8.5% will benefit from reduced rates.
In a move to further support a sector struggling to recover from the COVID pandemic, pubs will benefit by a planned increase of duty on spirits next year being cancelled, and there will be a lower rate of Duty on draught beer and cider which should reduce the price of a pint by 3p. However, to dampen enthusiasm around this, some pub groups have already warned the costs of wage increases could add 30 pence to the cost of a pint in future.