Online booze seller Master of Malt is rolling back prices across its website through this month as an act of “minor duty rebellion”.
This month, most wines and spirits have shot up in price as a result of government tax increases on alcohol.
Duty rates were frozen in the government’s 2020 autumn budget during the pandemic and extended for a further six months in February to 1 August this year. But the thaw has delivered a 10.1% cost increase on booze.
“F*** this shit!” said Master of Malt founder Justin Petszaft. “What are they going to take next, our first-born children?
“Therefore, in the spirit of retaining your children and sanity, trade customers purchasing throughout August will find their duty-related woes at least with us unexpectedly eased just a little bit,” he added.
Petszaft said the move was being made in the “spirit of wanting to help” and in protest of the government’s duty hike.
“The majority of our customers are independent retailers and businesses we’ve been working alongside over a decade. It’s been heartbreaking to see so many of them destroyed by the successive body blows of Brexit, Covid, the Russia-Ukraine war, and now uncontrolled inflation driving up essentially every input cost from energy to glass to labour,” Petszaft told The Grocer.
“A business that doesn’t exist pays no tax. What’s the point of creating an economic environment where even good businesses can’t survive? It just makes us all poorer and ensures less tax revenue to spend on critical national infrastructure,” he added.
All trade customers will automatically be refunded the duty at the checkout, and shown how much has been taken off. The rollback applies to all products over 22% abv with the new duty.
“We’re not hubristic enough to imagine that this will change things overnight, but even if it only plants a seed then I think it will have been worthwhile,” Petszaft said. “You don’t stand by while your neighbour’s house is burning. Someone had to do something, and if not us, then who?”
The duty rollback will be applied throughout August, but could be extended depending on take-up, Petszaft said.
“Ultimately whether we can afford to continue for longer will come down to the scale of the response – if customers really get behind it then we’ll be able to amortise our fixed costs across more orders, which will allow us to operate on thinner margins, and use the rest to keep funding the duty rollback,” he explained.
The duty freeze’s end coincides with a “radical” new alcohol duty system to “simplify” the current structure and tax alcoholic products the stronger they get, and is the biggest single increase to alcohol duty in nearly 50 years.
Prior to the rule change, alcoholic drinks were taxed based on the category they fell into. The new system broadly taxes alcoholic products at higher rates the stronger they become.
The Wine & Spirit Trade Association (WSTA) has called on government to scrap the tax hikes.
“We are careering towards an extremely tough period for wine and spirit businesses with tax hikes and other costs, including a prolonged cost of living crisis for their consumers, persistently high inflation – especially for food and drink – and rocketing prices for glass, leaving little room for many businesses to turn a profit,” said Miles Beale, CEO of the WSTA.
“Inevitably some won’t be able to stay afloat, with SMEs most at risk. Amongst all this pressure the government has chosen to impose more inflationary misery on consumers.”