Budget 2021: Reduction of tariffs on beer and prosecco – the new taxes on alcohol explained

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Budget 2021: Reduction of tariffs on beer and prosecco – the new taxes on alcohol explained


Chancellor Rishi Sunak has announced a series of alcohol tax changes which he has promised will reduce the cost of a pint in the pub by 3p “permanently”.

Alcohol will now be taxed according to its strength rather than the current system, which has been in place for decades and which the Institute of Fiscal Studies has called a “mess.”

Mr Sunak said the new steps in the alcohol tax would make it “simpler, fairer and healthier”.

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Budget announcements on alcohol, fuel and universal credit

The changes, which will take effect on February 1, 2023, are:

• The number of duty rates on alcoholic beverages will be reduced from 15 to six – “the stronger the drink, the higher the rate,” Sunak said

• All drinks above 8.5% ABV will pay the same rate of duty – so the rose will decrease by 23 pence per bottle while strong beer will be more expensive

• Fruit ciders and low alcohol spirit drinks, such as canned G&T, with less than 3.5% BAC will have lower levels.

• New Small Producer Relief will provide tax breaks for small brewers and distillers of beer, cider (for the first time) and other alcoholic beverages below 8.5% ABV

• The duty increased by 28% of sparkling wine will be reduced so that it is identical to that of still wine of equivalent strength.

• Pressure relief – lower duty rate on draft beer and cider from containers over 40 liters, with a 5% reduction

• An increase in the alcohol tax rate will be canceled from Wednesday

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Draft pints will be 3p cheaper ‘permanently’, says Rishi Sunak

How many will be your favorite drinks?

• Pint of Stella Artois: £ 3.80 (-3p in the pub, no change in store)

• Pint of Magners: 71 pence for the can in the store, £ 3.50 pint in the pub (-0.5 pence in the shop, -2 pence in the pub)

• Kopparberg Strawberry & Lime: £ 1.65 for the bottle in store, £ 3.80 pint at the pub (1p less in store, 13p less in the pub)

• Campo Viejo Rioja Gran Reserva (13.5% ABV): £ 16 for the bottle in store (47p more)

• Blossom Hill rose (11%): £ 8 for the bottle in store (12 pins less)

• Plaza Centro prosecco (11%): £ 7 for the bottle in store (87p less)

• Chapel Down English sparkling wine: £ 18 for an in-store bottle (64p less)

• Taylor’s port (20%): £ 15 for the bottle in store (£ 1.09 more)

• Famous Grouse Whiskey (40%): no change in the store

• Can of Gordon’s Pink Gin and Tonic (5%): £ 1.80 in store (9 pins less)

• Aperol (11%): £ 15 for the bottle in store (26 pence less)

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The changes were welcomed by English wine producers

The alcohol duty changes have also been accompanied by cuts and freezes in commercial rates for hospitality, including a 50% discount on commercial rates up to a maximum of £ 110,000.

The changes were widely welcomed by the beverage industry and investors, with shares of Wetherspoons rising 5% on the announcement, Young and Co’s by 2% and Marstons, the largest independent brewer, by 5%.

Emma McClarkin, managing director of the British Beer and Pub Association, said pubs, brewers and beer drinkers “will toast the Chancellor today”.

She said freezing beer duties instead of increasing them would save £ 177million and secure 9,000 jobs across the UK and the lower 5% duty rate on draft beer is worth £ 62million.

“However, the UK’s overall beer duty rate remains among the highest in Europe,” she said.

And she said the £ 110,000 cap on the business rate rebate is “a huge drag and means a significant number of pubs will not benefit from the relief at all.”

Climate change and longer summers in England and Wales will help viticulture
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English and Welsh wine producers to benefit from the changes

Andrew Carter, managing director of Chapel Down, which makes English sparkling and still wine, said the changes to the wine are “the best endorsement we could hope for” and the duty saved will create jobs and attract more young talent. in the English wine industry.

The Society of Independent Brewers (SIBA) called the streamlining of individual rights “radical” and said it was creating “a level playing field between small breweries and cider producers.”

“The lower duty rate for beer sold in pubs is a huge victory for the industry and something that SIBA has campaigned for,” said James Valder, CEO of SIBA.

He added that the alcohol tax freeze is “very helpful” at a time when brewers see increased supply and running costs.

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