Rishi Sunak’s announcement that taxes on alcoholic beverages are being slashed might have given parts of the industry reason to celebrate – not least sparkling wine producers, who will see a massive cut in duty – but for punters the reaction has been much more muted.
As the chancellor was revealing an overhaul of the UK's alcohol duty system, which he said would lead to the price of a pint in a pub falling by 3p, those frequenting the beer gardens of south London were far from enthusiastic about the impact it might have.
The conclusion drawn by those The Independent spoke to was that the rising cost of living would likely swallow up any savings in duty from Wednesday’s Budget commitment, which included cutting taxes on draught beer and cider and scrapping a planned increase in duty on spirits such as Scotch whisky, wine, cider and beer.
“Everything has gone up in price recently, so knocking 3p off a pint really won’t make much of a difference,” said one drinker at The Crooked Well in Camberwell, who asked not to be named.
“If it helps pubs that would be something. The way people are drinking now has changed, more are drinking at home, so it would be good if the changes will help address that,” he added, before joking that perhaps it was for the best that prices held steady. “We’re already a nation of alcoholics and this might just push us over the precipice,” he said.
Student Olivia Chapp who was with friends in the nearby Joiners Arms said she was “all for” cuts to alcohol duty. “If drinks will be cheaper then ‘yay’,” she said, though the chancellor’s slashing of the duty level of 28 per cent on sparkling wine, champagne, prosecco and cava would not see her popping corks any time soon.
“Prices have really risen recently, so it would have to be a lot cheaper before I change what I am drinking,” she said. “Cutting a bit off the price of a bottle of champagne or prosecco won’t make me suddenly go out and buy one.”
Away from the pubs, campaigners warned that the Treasury had “missed yet another important opportunity to significantly reduce the harm caused by alcohol” with the commitment to lower duty on many beverages.
Professor Sir Ian Gilmore, chair of the Alcohol Health Alliance UK, welcomed the move to tax alcohol primarily based on its strength, but said: “The decision to once again freeze alcohol duty is totally misguided. We are already at crisis point when it comes to alcohol harm.
“Deaths caused by alcohol reached record highs in 2020 and making alcohol even cheaper will only deepen the health inequalities that this government had promised to address.”
Malcolm Clark, senior cancer prevention policy manager at Cancer Research UK, said the cuts and freezes in alcohol duty risked “sending out the wrong message to the public. There’s no ‘safe’ level of drinking, and whatever your drinking habits, cutting down can reduce your risk of cancer”.
Jyotsna Vohra, director of policy at the Royal Society for Public Health, said the decision was “incompatible with the government’s many ambitions to levelling up health, tackling the NHS backlog and reducing crime”, coming after a pandemic which had “only worsened alcohol misuse, with alcohol-specific deaths increasing by 20 per cent”.
Dr Richard Piper, CEO of Alcohol Change UK, added: “The chancellor has missed yet another important opportunity to significantly reduce the harm caused by alcohol and to cover the costs of that harm. Instead, he has given a tax break to massive alcohol producers who have continued to see huge profits throughout the pandemic.
”This cut will hurt the public purse by further decreasing revenue receipts by £500 million next year alone, and could make cheap booze even more affordable, causing even greater harm”.
Elsewhere, reaction from industry was largely, though not entirely, positive.
The Society of Independent Brewers said the lower rate of duty for beer sold in pubs was a “huge win for the industry” but warned that most craft keg beer in the UK was sold in 30 litre kegs, meaning they cannot benefit from a new lower rate for draught beer and cider which will only apply to 40 litre containers.
But it was good news for Andrew Carter, CEO of English wine producer, Chapel Down, which has vineyards across Kent, Sussex, Surrey and Essex.
He said demand for his products had “never been higher” and the chancellor’s pledge to reduce sparkling wine duty to the same level as still wines would make the business “more competitive against our worldwide competitors”.
“This change will enable us to reinvest in our business and to continue growing at pace,” he said. “Chapel Down, along with the wider English wine industry, will be raising a toast to the chancellor for his support this week.”
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