Chancellor Rishi Sunak’s shake-up of alcohol duty laws in this week’s Budget is long overdue. And in the main both progressive and persuasive.
The first objective is simplification. And the reduction from 15 duty rates to six certainly achieves that.
He’s also sought to address rules that make no sense. Bringing sparkling wine duty in line with still is an easy win and great news for English wine producers, whose drinks tend to be fizzy and lower abv – thus continuing the Budget’s long-term support for UK-based alcoholic drinks. And while it’s also great news for prosecco, cava and champagne houses, why should the nation be punished for celebrations?
New small producer relief could also be a massive deal for independent cidermakers. Whereas in the US, small players get tax breaks and rates rise incrementally based on sales – leading to urban cideries popping up in every major city in the US, in the UK cider is dominated by a handful of major players in the south west, so the revolution we’ve seen in craft beer has been almost impossible to replicate.
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There’s also a degree of sense in redrawing alcohol duty rates around public health policy. Sure, it means red wine will be more expensive than white, and the government is going to end up taxing wines from hotter countries (ie new world) which tend to have a higher abv than old world wines. Ironically that will probably mean penalising wines from places we’re trying to do trade deals with. But it may also encourage further innovation, including in the low-to-no alcohol space, thus meeting consumer demand and potentially cutting both alcoholic intake and calorie consumption.
It’s also good to see the government helping pubs with the 5% draught duty cut (and cancelling the planned duty increases from the last Budget). But to implement a minimum threshold of 40-litre containers is ill thought-through and, potentially, a massive own goal, punishing small British brewers – who supply 20 to 30-litre containers – while handing bigger brewers and multinationals an unfair advantage. Luckily there’s still time to campaign. And it’s a simple change to make
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