Bottle of wine 'to go up significantly in price' after tomorrow's budget

A bottle of wine could go up by 44p as part of a ‘two-pronged attack’ on drinkers by Jeremy Hunt in the biggest increase in five decades.

In tomorrow’s Spring Budget, the Chancellor is set to raise alcohol duty in line with double-digit inflation from August 1.

But on top of this, the Government will also begin taxing alcohol based on strength, so a stronger drink will be taxed more than a weaker one.

This would mean wine drinkers face a 9% duty rise across 90% of still wines, analysis from the Wine and Spirits Trade Association (WSTA) shows.

Together, the two policies mean wine bottle price tags will go up by 20% – or 44p – the trade association says, based on the Treasury using a 10% inflation figure.

This would be the biggest single increase in wine since rates were first set nearly 50 years ago, the WSTA says.

Alcohol duty is currently frozen, but the Chancellor may thaw it out and increase it in line with Retail Prices Index (RPI) inflation, measured at 13.4% in January.

Fortified wine drinkers will especially feel the pinch by the double spike, with port set to rise by £1.29 a bottle and sherry by 97p.

Other drinks on alcohol shelves may also go up by 10%, such as a 75p increase on a 75cl bottle of vodka.

Though some drinks may go down in price instead. Pre-mixed 250 ml cans of gin and tonic will be 5p cheaper and sparkling wine will cost 19p less.

But the ‘super stealth tax’ on wine drinkers will do more harm than good for cash-strapped consumers, said WSTA chief executive Miles Beale.

‘The UK’s 33 million wine drinkers are blissfully unaware that the price of wine is set to rocket this summer,’ he said.

‘If the Chancellor goes ahead with a two-pronged attack on wine drinkers by adding an inflationary duty increase on top of the stealth tax already applied when the Government’s new alcohol duty regime kicks in this summer, duty alone will add 44p to a bottle of still wine.

‘If alcohol duty rates went up by RPI, this will be a crippling blow to the UK alcohol industry and consumers who will have to pay the price for tax rises during a cost-of-living crisis,’ Beale added.

The alcohol duty freeze was meant to end last month under Hunt’s plans to reboot the economy after Kwasi Kwarteng’s catastrophic mini-Budget last autumn.

But the Treasury moved to keep it frozen solid until August instead.

Get in touch with our news team by emailing us at [email protected]

For more stories like this, check our news page.

Source: Read Full Article