Tim Palmer The massive 65% increase in the tax on premium packaged spirits has overshadowed the rest of the good news for the drinks industry in the Chancellor's Budget. A general freeze on wine, beer and spirits duty was welcomed and the micro brewers are delighted with the introduction of a sliding scale which will cut their tax burden. It means the spirits industry is celebrating a record fifth freeze in a row and the added bonus that the controversial tax stamp scheme for spirits is no longer going to be pursued by the government. Cider makers also have good cause to be cheerful as the Chancellor has cut excise duty on their drinks by 2%. But the 65% tax hike on PPSs has caught most of the industry on the hop and one producer said his phones were red hot on the day after the Budget with calls from the trade looking to place orders before April 28 when the new tax will be imposed. Gordon Brown singled out the drinks to bring them into line with spirits duty which will add approximately 11p to a 275ml bottle before VAT and will probably lead to a 20p increase in the price to consumers. Producers are already looking at ways of getting round the tax by changing the alcohol base to that of wine or beer. This is common practice in the US, but may lead to problems for the top brands such as Bacardi Breezer and Smirnoff Ice which use the credibility of the parent spirit. Industry bosses have universally condemned the increase as a tax on innovation and success and a spokesman for Bacardi-Martini said: "The use of a selective tax to address the serious issue of binge drinking is ill-advised. The change is too great to ignore and we will have little option but to pass it on to the consumer as the Chancellor intends. There's a risk consumers will switch to other drinks." Conversely, the microbrewers are unlikely to pass on their windfalls, despite the Chancellor's suggestion there would be cheap beer for the World Cup. Mike Stafford, commercial director of the Society of Independent Brewers, said almost all his 240 members would benefit and would use the cash to invest in their businesses. "We can't just pass on the cut. We don't think consumers will be disappointed as we are talking about niche products." {{NEWS }}