- Oops!Something went wrong.Please try again later.
The chancellor has announced an overhaul of taxes on alcoholic beverages in his budget.
Rishi Sunak said the changes to alcohol duty were historic and being brought in to address an out-of-date system.
He described the 5% cut to duty on draught beer and cider as part of the “most radical” reforms to alcohol duty in a century designed to make them fairer.
The reforms, which come into effect from 1 February 2023, will reshape alcohol duty pricing by taxing them in line with their alcohol by volume (ABV).
Until then, duty rates on alcohol will remain frozen as they are now.
The Treasury claim the new announcements will save the taxpayer £3bn.
Consumers will see price changes both in shops and supermarkets as well as in pubs and bars. But what does it mean for your favourite drink?
A 70cl bottle of Bailey's Irish Cream will drop by around 41p.
The price of 70cl bottle of Smirnoff, another British favourite, won't change – and 75cl bottle of the red wine Campo Viejo Rioja Gran Reserva will cost an extra 47p.
Cuts of 5% to draught beer and cider duty will take around 3p off a pint of beer, and a 10.5% ABV bottle of rose will be 23p cheaper.
In response, Wine Drinkers UK said: “We welcome the cancellation of the planned increased in all alcohol duty and the government’s long overdue decision to abandon the “super-tax” on sparkling wines.
"On the proposed wider reform of the alcohol duty we await clarification from HM Treasury in the coming days.
"We hope this will put a stop to the historic unfairness of favouring one drink over another.”
Elsewhere, EY's head of tax and policy, Chris Sanger, said the changes would not do enough to tackle the cost of living crisis.
"The sector is facing a combination of challenges, including rising food and energy costs, and national living wage and employers’ NI [national insurance] contribution increases from next April," he said.
“However, the duty changes may not be enough to prevent rising prices at bars and tills as companies in the sector try to cover the cost of all their input prices.”
The announcements on alcohol came under fierce criticism from the Labour party with accusations of misplaced priorities, and some experts claimed "the poorest get nothing" from aspects of Sunak's budget.
Labour MP Stella Creasy claimed Sunak was "putting Prosecco before parents", while Labour MP Sarah Champion said: “Thank goodness we can all now afford to drown our sorrows in a pint, as our cost of living goes through the roof (the roof that many won’t be able to afford to keep).”
Rachel Reeves, Labour's shadow chancellor, said struggling families would see Sunak as “living in a parallel universe” after his announcements.
"Families struggling with a cost-of-living crisis, businesses hit by a supply chain crisis, those who rely on our schools and hospitals and our police – they won’t recognise the world the chancellor is describing.
“They will think he is living in a parallel universe."
Watch: Budget 2021: What Did We Learn From Rishi Sunak’s Speech?