Distillers warn of 'shortsighted' alcohol duty tax

The UK Spirits Alliance (UKSA) has warned that the upcoming rise in alcohol duties will be “actively damaging” to the hospitality sector.

The UKSA, an alliance of around 300 small and independent distillers, has joined cross-party MPs to express concern about the upcoming rise in alcohol duty, which comes into effect on 1 August.

Chancellor Jeremy Hunt announced the changes to alcohol duty in his spring Budget.

The government will increase alcohol duty rates in line with the Retail Price Index (RPI) at 10.1%. The new duty will charge alcohol producers according to alcohol strength.

For most spirits (where strength exceeds 22% ABV), the tax hike will increase from 20% to 23%. Spirits typically range in strength from 37.5% ABV up to 50% ABV.

A UKSA spokesperson said: “This tax hike is not just shortsighted, but it is actively damaging to pubs, distilleries and the hospitality sector.”

They added: “With the 10.1% hike in spirits duty – the highest since 1981 – the chancellor has failed to reflect the popularity of the diverse modern hospitality industry, driven by the growth in innovative British products such as those created by the small distillers within our membership.”

They added that one in three purchases at the pub involves spirits.

Jay Byers, owner of gin and vodka distillery Steel River Drinks in Teesside, said: “This hike on spirits duty is going to come as a bombshell for the whole industry. We are already managing shocking energy bills, record inflation and rocketing interest rates, and a fresh hike on duty is the last thing distillers and our hospitality industry needs.”

Byers added that distilleries like his “create local jobs and growth directly and support the local community” but the chancellor is jeopardising the hospitality industry with the introduction of the new tax “at a time when they can least afford it”.

Image: barmalini/Shutterstock