Rishi’s alcohol budget: how much cheaper YOUR favorite drink will be
DRINKERS could see the price of their favorite drink drop after Rishi Sunak announced the biggest alcohol tax shake in a century.
In his fall budget, the chancellor called the current alcohol tax system “irrational” and promised a major overhaul.
Under the current complicated system, there are 15 tax brackets on alcohol. But that will be reduced to just six.
Drinks will now be taxed according to their alcohol content.
It will end the so-called Girls Night Out tax, which subjects wine and sparkling wines to much higher tariff rates than beer.
The move will lead to a drop in the tax on an ABV rose of 10.5% from 23 pence per bottle.
Mr Sunak said the reforms were “gradual” and “very necessary” and would mark the biggest alcohol tax upheaval in decades.
The chancellor said the changes would be fairer and reflect the way people drink today.
However, thirsty punters may have to wait to get their hands on some cheap alcohol.
The changes won’t take effect until February 2023, and even then there’s no guarantee that stores and pubs will pass on the savings.
Here we take a look at how the ad will affect the price of your favorite drinks.
Which drink is getting cheaper?
Fizz fans are on the verge of the biggest price drop, with a whopping 87p set to release a bottle of Canti Prosecco.
Mr Sunak said that the consumption of sparkling wines like prosecco has doubled and is not stronger than still wines, and therefore should not be taxed differently.
“I am going to end the irrational 28% duty premium they are currently paying,” he added.
“Sparkling wines – wherever they are produced – will now pay the same duty as still wines of equivalent strength.”
The tax cut will reduce 64p on a bottle of Freixenet Prosecco (12% ABV) and the same amount on a bottle of English Chapel Down sparkling wine.
A bottle of Martini Asti (7.5% ABV) will drop by £ 1.07.
Cider and beer
For the first time, the tax on fruit cider and beer will be aligned.
This means a 20% reduction in the duty on draft fruit cider, which brings down the price of a pint by 13 pence.
Fruit cider only represented one in 1,000 ciders sold in 2005, but now accounts for one in four cider sales, the Chancellor said.
“But they can pay two or three times more duty than cider which is made with apples or pears. So I reduce the duty on them too,” he added.
The tax cut will lose 1 pence on a bottle of Kopparberg or Old Mout fruity cider when you buy a bottle in a store.
A pint of Kopparberg Strawberry and Lime would cost 13p less in a pub.
The duty rates for all draft beers and ciders will be reduced by 5%, which will reduce the price of a pint by 3p.
It’s the biggest cup of beer in 50 years, and the biggest cup of cider in a century.
With the weaker beer now in a new strip, the price of a 3.4% ABV pint will drop by 25p.
While there is no change in store prices, that means you’ll get a pint of Stella Artois, Guinness, Fosters, or Carling for 3p less in pubs.
A pint of Adnams Lighthouse would cost 25 pence less in a pub and 22 pence for a store-bought bottle.
Canned gin and liqueurs
Fans of a canned gin will see the price drop by 9p, as the new tax system will recognize the lower ABV of pre-mixed drinks.
A Gordon’s Pink Gin and Tonic will cost £ 1.80 per store bought 250ml can, or 9p.
A can of Jack Daniels and Cola will cost 12 pence less, Pimm’s No. 1 Cup and Lemonade 10 pence less, and a Malibu Pina Colada 9 pence less.
These figures relate to premixed boxes purchased in stores.
Those who like a Bailey’s after dinner will see the price of a bottle drop by 41 pence under the new rules.
Meanwhile, a bottle of Aperol Aperitivo will come down to 26p and Tia Maria to 48p.
Which drinks are more and more expensive?
The tax review, however, is not good news for all drinkers.
As the new system now directly links the price of alcohol to its concentration, the price of some products with higher ABV will increase.
A bottle of 7.5% ABV Frosty Jack Cider, for example, would pay 45p more in tax and the same for 7.5% ABC Ace Cider.
A can of 4.8% ABV Thatcher’s Gold cider would be subject to a penny more in duty.
Red wines, which tend to have a higher ABV than white or rosé wines, will also pay more duty.
A bottle of 13% ABV Hardy’s VR Merlot will pay 35p more in tax and 13.5% ABV Campo Viejo Rioja 47p more.
The price of sherry and port is also expected to rise under the revamped system.
A bottle of Port Taylor’s at 20% ABV would pay £ 1.09 more in tax and Harveys Sherry (17.5% ABV) 51p more.
How will the new system work?
Under the revamped tax system, the number of brackets for alcohol tax will drop from 15 to just six.
The tariff rates for draft beer and cider will be aligned, reducing the price of beer by 3 pence and fruit cider, which was previously subject to a much higher tax, by 13 pence.
The government has said it will introduce a new rate for low-alcohol drinks of less than 3.5% ABV to encourage the development of new products in the hope that it will encourage more responsible consumption.
There will be rates for products between 1.2% to 3.4% ABV, 3.5% to 8.4% ABV, 8.5% to 22% ABV and those above 22% ABV.
The Chancellor said tying the tax to the VBA was “common sense”.
All drinks stronger than 8.5% will pay the same rate of duty regardless of product type, putting stronger beers on a par with wine and spirits for the first time.
The reforms will take effect on February 1, 2023.
A helping hand for brewers
Small brewers should also take advantage of Small Brewers Relief to allow small businesses to diversify their product lines.
Finally, a boost to pubs will come in the form of a so-called Draft Relief.
The government will cut tariffs on draft beer and cider by 5%, which is expected to reduce the price of a pint by 3p.
MPs and publicans have long pleaded with Sunak to cut the so-called “barrel tax” amid fears that too many drinkers may close their doors.
Duty rates on beer, cider, wine and spirits will also be frozen for another year.
The move is expected to save consumers £ 3 billion over the next five years and bolster the struggling ad industry.
Here is the full list of how the drinks will be affected.
- Stella Artois (4.6%): £ 3.80 a pint – 3p minus tax. No change in store
- Guinness (4.2%): £ 4.20 a pint – 3 pence less tax. No change in store
- Favorites (4%): £ 3.20 a pint – 3p minus tax. No change in store
- Carling (4%): £ 3.70 a pint – 3p minus tax. No change in store
- San Miguel (5%): £ 4 a pint – 3 pence less tax. No change in store
- Adnams Lighthouse (3.4%): £ 3.50 a pint – 25 pence less. £ 1.25 per 500ml bottle in shos – 22p minus tax
- Strongbow (4.5%): £ 3.50 a pint – 2p minus tax. 61p per 440ml can in store – 0.5p less tax
- Magners (4.5%): £ 3.50 a pint – 2p minus tax. 75p per 440ml can in store – 0.5p less tax
- Stowford Press (4.5%): £ 3.55 a pint – 2p minus tax. 75p per 440ml can in store – 0.5p less tax
- Thatcher’s Gold (4.8%): £ 3.50 a pint – 0.2 pence less. 71p per 440ml can in stores – 1p plus tax
- Frosty Jack’s (7.5%): £ 3.70 per 2.5L bottle in store – 45 pence more
- Ace Cider (7.5%): £ 3.99 per 2.5L in stores – 45p plus tax
- Strongbow Dark Fruits (4%): £ 3.70 a pint – 13p minus tax. £ 1 per 440ml can in store – 1p minus tax
- Strawberry and Kopparberg Lime (4%): £ 3.80 a pint – 13 pence minus tax. £ 1.65 per 500ml bottle in store – 1p minus tax
- Kopparberg Mixed Fruit (4%): £ 3.80 a pint – 13 pence minus tax. £ 1.65 per 500ml bottle in store – 1p minus tax
- Thatcher’s Cloudy Lemon Cider (4%) – £ 1.40 per 440ml can in stores – 1p less tax
- Bulmer’s Red Berries and Lime (4%) – £ 1.30 per 500ml bottle in store – 1p less tax
- Old Mount Kiwi and Lime (4%) – £ 1.65 per 500ml bottle in stores – 1p less tax
- JP Chenet Sauvignon Blanc (11%) – £ 9 per bottle of 75CL in store – 12p HT
- Porta 6 Vinho Verde (9.5%): £ 9 per 75cl bottle in store – 47p minus tax.
- Hardy’s VR Merlot (13%): £ 7 per 75cl bottle in store – 35p plus tax
- Campo Viejo Rioja Gran Reserva (13.5%): £ 16 per 75 cl bottle in store – 47p plus tax
- Echo Falls Zinfandel (10.5%): £ 6.50 per 75cl bottle in store – 23 pence less
- Blossom Hill Rose (11%): £ 8 per 75cl bottle in store – 12p minus tax
- Plaza Centro Prosecco (11%): £ 7 per 75cl bottle in store – 87p less tax
- Canti Prosecco (11%): £ 8.50 per 75cl bottle in store – 64p per less tax
- Martin Asti (7.5%): £ 7.50 per 75cl bottle in store – £ 1.07 minus tax
- Chapel Down English Sparking Wine (12%) – £ 18 per 74 CL bottle in store – 64 p less tax
- Gospel Green Sparking Cyder (8.4%): £ 13.50 per 75cl bottle in store – 89p minus tax
- Buckfast (15%): £ 8.50 per 75cl bottle in store – 81p plus tax
- Harveys Sherry (17.5%): £ 12 per 75cl bottle in store – 51p plus tax
- Croft Sherry (17.5%): £ 12 per 75cl bottle in store – 51p plus tax
- Taylor’s Port (20%): £ 15 per 75cl bottle in store – £ 1.09 plus tax
- Cockburn’s Port (20%): £ 12 per 75 cl bottle in store £ 1.09 plus tax
- Blandy’s Duke of Clarence Madeira (19%): £ 12 per 75cl bottle in store – 86p plus tax
- Smirnoff Vodka (40%): no change
- Famous Grouse Whiskey (40%): no change
- Gordon’s Pink Gin and Tonic (5%): £ 1.80 per 250ml can in store – 9p minus tax
- Jack Daniels and Cola: £ 2 per 330ml can in store – 12p minus tax
- Pimm’s No.1 Cup and Lemonade (5.4%): £ 1.80 per 250ml can in store – 10p less tax
- Malibu Pina colada (5%): £ 1.60 per 250ml can in store – 9p minus tax
- Bailey’s Irish Cream (17%): 17 per bottle of 70CL in store 41p less taxes
- Coconut Malibu White Run: £ 15 per 70cl bottle in store – 50p less tax
- Aperol Aperitivo (11%): £ 15 per bottle of 70CL in store – 26p less taxes
- Kahlua coffee liqueur (16%): £ 15.50 per 70cl bottle in store – 38p less tax
- Edinburgh Gin Rhubarb and Ginger (20%): £ 16.50 per 50cl bottle in store – 34p less tax
- Tia Maria (20%): £ 15 per 70 cl bottle in store – 48p minus tax
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