The wine and spirits industry has welcomed the freeze to alcohol duty, saying it comes as “a huge relief” to a sector that has “taken a battering”.
As well as confirming the “Brexit Pubs Guarantee”, which means duty on a pint is always lower than in the shops, the Chancellor has announced the freezing of all alcohol duty until August 1 next year.
The Wine and Spirit Trade Association (WSTA) said British businesses were bracing themselves for a second duty increase at the autumn statement, which it said would have come as a “punishing blow” after the Government’s new alcohol duty regime, brought in on August 1, which introduced the largest alcohol tax rise for almost 50 years.
The decision to freeze excise duty came at a time when wine and spirits had seen a near triple digit increase in inflation in the last three months, WSTA said.
The sector was also experiencing “dramatically increased” supply chain costs and an “astronomic increase” in glass recycling fees.
WSTA chief executive Miles Beale said: “The alcohol duty freeze comes as a huge relief to wine and spirit businesses and the hospitality sector who have taken a battering over the last few years.
“Following the introduction of an entirely new alcohol tax regime and huge hike in August, the latest data shows a worrying decline in sales, which concerns businesses of all sizes and which would result in less revenue for the Exchequer.
“A second duty rise would have been disastrous.
“We are pleased that the frustrations of consumers, who are fed up with never ending price rises, and of businesses struggling with the cost and complexities of the new system have been heeded.
“These are ongoing concerns about the impact of the new regime, which need to be kept under review. We implore the Chancellor and his team to lock in the freeze until at least the end of this Parliament. This will keep people in jobs and mean consumers will still be able to enjoy a drink at a price they can afford.”
UK Spirits Alliance spokesman and distiller Stephen Russell said: “We raise a toast to the Chancellor today for his decision to freeze duty and thank him for listening to thousands of distillers, landlords and bar owners up and down the UK.
“He has raised the spirits of the sector, and his decision today is a vote of confidence in this vibrant homegrown sector. Today’s freeze will drive growth in the industry, support jobs and help consumers at a time when household budgets continue to be squeezed”.
Ed Baker, managing director of Kingsland Drinks, said: “The August 1 increases are making the UK consumer pay some of the highest alcohol taxes in Europe, which are now filtering through to higher pricing for them and lower sales for us.
“An additional rise would have damaged our industry even further.”
Kathy Caton, managing director of Brighton Gin, said: “What a great relief for us and our fellow craft distillers that duty has been frozen – we’re operating in such a challenging environment currently, but this is definitely a fillip to the industry.
“The August duty hike has had a very clear and damaging effect on sales. There have already been some very high-profile closures of businesses in our sector and a second duty rise could have seen more distilleries go bust.
“With the vast majority of our customers being within the hospitality industry and us being publicans ourselves, we’re really glad that the hospitality sector and its suppliers are being supported.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, said the announcement did not mean drinkers were off the hook though.
She said: “Inflation figures out earlier this month showed that the price of fortified wines is up 15.3% and beer is up 12%, thanks in part to higher alcohol duty.
“It means raising a glass this Christmas will still be an expensive business.”