Some sections of the media – although fewer than last year – were misled by the statement in the Budget that there would be no change to already announced plans for alcohol duties, and wrongly claimed that duties were being “frozen”. In fact, of course, they’re going up by an eye-watering 5%, which means that a pint of 4% beer will bear duty plus VAT on duty of 53p.
There had been fears that further nasties might be lurking in the Budget, such as an increase in High Strength Beer Duty, or higher cider duties, but in the event nothing materialised. However, it must be likely that further punitive increases will emerge from the government’s Alcohol Strategy review.
One little wrinkle that has been sneaked through is that duties are being increased each year by the RPI (plus the 2% “escalator”), while pensions and benefits are only uprated by the generally lower CPI figure. The result of this is that duties will steadily outpace the incomes of poorer people. It seems that the government choose whichever figure they get the best deal from.
Anyway, look forward to more closed pubs, more struggling breweries and more happy alcohol smugglers in the coming year. Will this also sound the death knell for Morrisons’ 4 for £5.50 deal?