Taxes on wines and spirits rise as alcohol duty changes come into force

Jessica Sheldon

By Jessica Sheldon

Published: 01/08/2023

- 14:13

Updated: 01/08/2023

- 15:42

The reform comes amid the end of the alcohol duty freeze, which has been frozen since the since 2020 Autumn Budget.

An overhaul to the way alcohol is taxed will see hikes of up to 20 per cent on wine, although lower-strength drinks will cost less.

Alcohol will now be taxed based on its strength, sparking complaints from spirits and wine manufacturing groups that they’ve been unfairly hit.

Prime Minister Rishi Sunak said the move was “the most radical simplification of alcohol duties for over 140 years”.

The changes come as the tax on alcohol increased by 10.1 per cent today, following the end of the alcohol duty freeze.

People clinking wine glasses while having dinner

Tax on wines and spirits have risen as alcohol duty changes came into force


Scotch Whisky Association director of strategy Graeme Littlejohn said: “The 10.1 per cent duty increase is a hammer blow for distillers and consumers.

“At a time when inflation has only just started to creep downwards, this tax increase will continue to fuel inflation and make it more difficult for the Scotch Whisky industry to invest in growth and job creation in Scotland and across the UK supply chain.”

Duty will increase overall, with most wines and spirits rising, but it will fall on lower-alcohol drinks and the majority of sparkling wine.

Drinks with alcohol by volume (ABV) below 3.5 per cent will be taxed at a lower rate.

Tax on drinks with ABV over 8.5 per cent will stay the same, whether it is wine, sprit or beer.

Sparkling wine was previously taxed at a higher rate than still wine but it will now by 19 pence cheaper for a standard-strength bottle, provided retailers pass on the changes by lowering prices.

Duty will rise by 44 pence on a bottle of wine, meaning an extra 53 pence for customers when combined with VAT, according to the Wine and Spirit Trade Association (WSTA).

However, a bottle of 9.5 per cent ABV white wine will be 24 pence lower, and a bottle of sparkling wine should drop by 61 per cent. A bottle of 8.4 per cent ABV sparkling cider will fall by 72 pence.

The total tax on a bottle of gin or vodka will rise by around 90 pence.

Duty on 18 per cent cream sherry will rise from £2.98 to £3.85, with VAT adding up to an increase of more than £1 a bottle, while a bottle of port will go up by more than £1.50.

The Treasury’s examples of price drops, subject to VAT being passed through wherever alcohol is purchased, include:

  • Four per cent ABV pint of draught beer – zero pence higher
  • 4.5 per cent ABV pint of draught apple cider – one pence lower
  • 3.4 per cent ABV 500ml bottle of beer – 20p lower in a shop and 25p lower in a pub
  • Four per cent ABV pint of draught fruit cider – 10p lower
  • 5.4 per cent ABV 250ml can of spirits-based ‘Ready To Drink’ – six pence lower in supermarket and 16p lower if sold on draught
  • Five percent 330ml can of spirits-based “Ready To Drink” – eight pence lower
  • 9.5 per cent ABV 75cl white wine – 24p lower
  • 11 per cent ABV 75cl sparkling wine - 61 pence lower
  • 8.4 per cent ABV 75cl sparkling cider – 72p lower
  • 21 per cent ABV 70cl spirits liqueur - four pence lower

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