Alcohol duty freeze welcomed by drinks industry

A planned rise in alcohol duty was among the measures scotched by the Chancellor in the Commons on Friday.

In a mini-budget that put tax cuts front and centre, Kwasi Kwarteng announced that an increase in duty rates for beer, cider, wine and spirits would be cancelled.

Alongside an 18-month transitional measure for wine duty, he also said he would extend draught relief to smaller kegs to help support smaller breweries.

Whisky production
Duty freeze ‘will save £1.35 on an average bottle of whisky’ (PA)

The Scotch Whisky Association praised the move by the Chancellor, saying the Government had “delivered”.

Mr Kwarteng told MPs he had “listened to industry concerns about the ongoing reforms”.

“At this difficult time, we are not going to let alcohol duty rates rise in line with RPI. So I can announce that the planned increases in the duty rates for beer, for cider, for wine, and for spirits will all be cancelled.”

Scotch Whisky Association chief executive Mark Kent said that the duty freeze would save consumers £1.35 on the average priced bottle of whisky.

“The duty freeze will not only support our sector, but the hospitality industry and the wider economy,” he said.

The Office of Budget Responsibility had predicted that the Government would raise £12.7 billion in 2022/23 from the tax paid on alcohol.

The duty on alcohol is reviewed each year to keep in line with inflation, although in recent years duty rates have often been cut or frozen by the Government.

Last year the Government announced plans to reform the alcohol taxation system from next year, which will see all drinks taxed in proportion to their alcohol content.