Source: Unsplash

New Chancellor Jeremy Hunt has decided to reverse the freeze on alcohol duty

New Chancellor of the Exchequer Jeremy Hunt’s decision to reverse the freeze on alcohol duty has been met with dismay by the drinks industry.

The freeze on alcohol duty was announced last month by the recently sacked Kwasi Kwarteng, and was meant to come into force from February 2023. The move was heralded as saving the industry some £600m in tax. 

However, the new Chancellor announced this morning there would be no freeze, as he unceremoniously tore up much of Kwarteng’s recent fiscal plan.

British Beer & Pub Association CEO Emma McClarkin said the move would hit brewers and pubs hard. “The freeze would have delivered a £300m saving to our industry at a time when we desperately need any relief we can get, to help to keep a lid on spiralling costs and keep the price of pint affordable for pub goers this winter,” she said.

“The cost of doing business is completely out of control for pubs and brewers and the failure to act today to reduce pressures on businesses will hit them extremely hard. Our sector needs stability to plan and be able to keep serving communities at a reasonable price, but instead has been subject to ongoing uncertainty for too long.

Waiting until a February Budget, she said, would be leaving it too late. “We need the Chancellor to act before winter really starts to bite for our brewers, pubs and the customers and we lose them forever in communities across the UK.”

Wine & Spirit Trade Association CEO Miles Beale called the u-turn “extremely disappointing” and “yet another change of plans which will cause disruption to UK wine and spirit businesses who have spent the last two years being bounced from one crisis to the next”.

“Raising taxes is not only bad news for consumers worried about the cost of living, but also stifles growth and innovation for British businesses trying to recover from the pandemic and supply chain issues. History has shown that freezing alcohol duty does not have a negative impact on Treasury coffers.”

Society of Independent Brewers national chairman Roy Allkin said Hunt’s statement ”undoes many of the positive measures announced in the mini-budget only a few weeks ago” including the duty freeze.

“Small independent brewers will now have to wait a further few weeks to understand what this means for them, as the shake-up of the overarching alcohol duty system is still expected to go ahead.

“Again this is creating more uncertainty for small brewers who are facing an extremely challenging trading environment dominated by energy spikes, price increases and a cost of living crisis.”