​Taxing Times: Alcohol Duty Debate Heats Up Pre-Autumn Statement

The beverage sector is calling on the Chancellor, Jeremy Hunt, to honour his commitment to reducing inflation by scrapping the proposed hike in alcohol duty in his forthcoming Autumn Statement.

UK Government, CC BY 2.0, via Wikimedia Commons

In a concerted effort, over 400 beverage companies, including prominent organisations such as the Scotch Whisky Association, the Wine and Spirits Trade Association, and the UK Spirits Alliance, have implored the Chancellor to reconsider the tax increase, emphasising the detrimental impact it could have in the broader hospitality industry.

This plea follows an earlier tax increase during the summer, which saw a comprehensive reform of the alcohol duty system, resulting in a 10.1 per cent rise in excise duty on alcoholic beverages from the 1st of August.

Industry groups caution that a further increase could exacerbate inflation, which both Hunt and Prime Minister Rishi Sunak have vowed to cut by half before the year's end.

Miles Beale, the WSTA's Chief Executive, stated: "The repercussions of the August duty increase are evident: they've intensified inflation, raised prices for consumers who are already under financial pressure and harmed British businesses throughout the already struggling alcoholic drinks and hospitality sectors, including distilleries."

He also mentioned that an additional rise in alcohol duty would be counterproductive and could potentially be the last straw for some British beverage companies.

Echoing this sentiment, Mark Kent, the Chief Executive of the Scotch Whisky Association, expressed that the August duty raise was an error that should not be repeated in November, highlighting the anxiety among distillers about the impact of further tax increases on producers, the businesses they serve, and the customers.

The Chancellor's Autumn Statement, scheduled for the 22nd of November, is a significant event on the political calendar, where he will brief Parliament about the nation's finances and the government's fiscal and expenditure strategies.

We invite our readers to share their thoughts and engage in the conversation - do you think the Chancellor should heed the drinks industry's call?