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Alcohol duty escalator scrapped in Budget

Published:  19 March, 2014

The alcohol duty escalator has been scrapped, while duty on spirits has been frozen and beer duty has been cut by 1p per pint.

Following the hard-fought campaign from the wine and spirits trade, Chancellor George Osborne listened to the industry's plea to scrap the escalator to provide a boost to jobs and the wider economy.

Duty on wine will rise in line with inflation, however, which is expected to be around 3%, and usually kicks in the weekend following the Budget announcement.

Osborne said that new rules around minimum pricing would safeguard the on-trade in place of the duty escalator, where previously supermarkets were undercutting pubs. Instead he announced the "far more targeted approach" which was called for by "so many responsible drinkers" and scrapped the alcohol duty escalator. What's more, to protect the UK's drinks producers, he singled out Scotch whisky and cider when announcing duty freezes.

In his speech Osborne stated: "We've introduced new laws to prevent alcohol being sold below minimum tax rates, and this helps prevent supermarkets undercutting pubs, and helps stop problem drinking. It's a far more targeted approach than the alcohol duty escalator hated by many responsible drinkers.

"Today, I am scrapping that escalator for all alcohol duties.

"They will rise with inflation, with these exceptions: Scottish Whisky is a huge British success story. To support that industry, instead of raising duties on whisky and other spirits, I am today going to freeze them.

"And with some cider makers in the West Country hit hard by the recent weather, I am going to help them by freezing the duty on ordinary cider too.

"And then there's beer. I know the industry, led so ably by my Honourable Friend for Burton, have been campaigning for a freeze. But beer duty next week will not be frozen. It will be cut again by 1 pence. Pubs saved. Jobs created. A penny off a pint for the second year running."

Stay tuned to our website for further reaction to today's Budget, or follow @harperswine on Twitter. Let us know what impact this will have on your business by emailing Gemma McKenna or commenting below