Budget 2021 alcohol duty sends UK spirit and wine prices soaring on strong booze

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Strong booze will be hit with increased duty, Rishi Sunak outlined in his 2021 Budget.

The Chancellor blasted the alcohol duty system as "outdated" and announced a five step plan to change it which is based on how much alcohol is in a drink.

It is bad news for sprit lovers as Mr Sunak simply outlined: "The stronger the drink, the higher the rate."

During the UK government's second Budget of the year announcement, Mr Sunak promised on Wednesday afternoon that it will bring "growth up, jobs up and debt down".

Lower strength booze however will be cheaper which will make for happy reading for anyone who prefers their tipple low in ABV.

Mr Sunak said the planned increase in duty on spirits, wine, cider and beer will be cancelled in a bid to support "the home of British community life for centuries".

Thanks to the scrapping of expected duty rises, the price of a pint at a pub will actually be 3p cheaper, the Chancellor told the House of Commons.

A "draught relief" introduced to bolster pubs after the pandemic will apply a 5% cut to duty on draught beer and cider served from draught containers over 40 litres.

Mr Sunak declared: "That’s the biggest cut to cider duty since 1923," and "The biggest cut to fruit ciders in a generation. The biggest cut to beer duty for 50 years."

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The move is a: "long-term investment in British pubs of £100m a year and a permanent cut in the cost of a pint by 3p," he continued.

However the Chancellor also confirmed the national living wage will go up early next year, which means so too will the price of booze, say pub landlords as they reach to cover the hiked cost of staff.

The decision to raise the national living wage from £8.91 to £9.50 an hour means businesses must find a means to pay the difference.

But as the hospitality industry is "coming off life support" following the coronavirus pandemic, City Pub Group chairman Clive Watson said: "We cannot absorb all these increased costs whether it is the energy costs whether it is food inflation, whether it is labour costs.

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"So the only way forward for us is to put the price of beer and food up in our pubs.

"No one wants to do that but I reckon the price of beer would probably have to go up 25p-30p a pint to take account of all these increased costs."

A poll showed that eight in 10 boozers are set to (or already have) upped their prices in response to the increase in costs.

  • Pubs
  • The Budget
  • Alcohol

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