Surge in alcohol prices hits consumers

Published: 22 August, 2011

Annual inflation on alcohol has soared above increases in duty and VAT, according to new figures released by the Wilson Drinks Report.

The latest CPI and RPI inflation data shows that the price of alcohol has not only increased significantly more than the overall basket of consumer goods and services, but has also increased much more than the impact of recent increases in duty and VAT.

The highest increase was recorded in the spirits category, where prices increased 9.7% in the year to July 2011, according to the CPI data released by ONS. Beer prices increased by 9.5%, putting further pressure on pubs and brewers.

However, only part of this inflation-busting increase can be attributable to recent changes in duty and VAT, according to Tim Wilson, managing director of the Wilson Drinks Report. "The drinks industry has taken a big hit in terms of recent increases in duty and VAT. However, our analysis shows that the impact of increases in duty and VAT on a pint of Stella Artois is 5.3% between July 2010 and July 2011, whereas beer inflation has gone up by 9.5%," he said.

"Similarly the impact of increases in duty and VAT on a £15 bottle of vodka was 5.7%, compared to an increase in the spirits CPI of 9.7%."

The latest edition of WDR (V7) includes a detailed analysis of the impact of recent changes in duty and VAT on the retail price of popular consumer drinks in both the off and on-trade.

Wilson added: "However it is not all bad news in the CPI and RPI figures. Inflation on restaurant meals has remained less than 5% for the last 12 monthly sets of inflation figures."

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